Masterbatch Market

Market Overview

The global masterbatch market size was valued at USD 16.75 billion in 2022. It is estimated to reach USD 30.44 billion by 2031, growing at a CAGR of 6.69% during the forecast period (2023–2031).

A masterbatch is an additive, either solid or liquid, used to paint or impart certain qualities to plastics. The plastic products are colored or shaded using colored masterbatch. They can communicate qualities like energy, effect, UV stabilizer, biodegradable, and antioxidant. In addition, the product should ideally be composed of a pigment and additive mixture enclosed in a carrier resin that has been heated, cooled, and then chopped into granular form. It aids the processor in efficiently coloring raw polymer throughout plastics manufacturing. It is inexpensive, adds color to the polymer, and gives plastics manufacturers significant financial savings.

Masterbatches have been widely used in several decades of polymer compounding, such as injection, blow, extrusion, compression, rotational molding, and thermoforming. These additives reduce the safety risk associated with powder pigments because they are easy to apply and provide a clean, stable process. Major end-user segments for masterbatch include buyer consumer goods, automotive, electrical and electronics, infrastructure and industrial, and packaging.

Market Dynamics

Market Drivers

Growing Demand for Sustainable Additive Masterbatch Solutions

Numerous additives and polymer combinations, such as flame retardant and sustainable additive masterbatches (viscosity modifiers, chain extenders, foaming agents, nucleating agents, and corrosion-resistant masterbatch), are evolving to fulfill the changing needs of the market. The masterbatch industry has been growing significantly due to the changing requirements of the end-user industry, leading to changes in the products, manufacturing processes, and innovation in engineering applications.

Masterbatches are used in packaging, automotive, agricultural, and medical sectors. They also aid in obtaining durability and additional customized features, such as UV resistance, wear and tear resistance, and heat resistance to the base plastic. The masterbatch industry is gradually shifting from its traditional usage of providing petroleum-based masterbatches to sustainable masterbatches, thereby adding value to a product in terms of sustainability and increasing market growth.

Increasing Demand for Polyethylene Based Performance Polymers

Performance polymers are plastics with better mechanical properties such as strength, elasticity, and impact resistance than generally produced polymers. Polyethylene, a cheap, durable, and easy-to-produce plastic resin, has witnessed a boost in demand from the performance polymers industry. Polyethylene significantly improves mechanical properties when blended with certain additives and showcases chemical, thermal, and environmental resistance. This renders polyethylene a suitable polymer resin for producing performance polymers used in masterbatches since most masterbatches require significant improvement in mechanical, thermal, and chemical properties and resistances for their end-use applications. Therefore, the increasing demand for polyethylene-based performance polymers boosts the global market growth.

Market Restraint

Stringent Government Regulations Against Plastics

Increasing government regulations related to plastic manufacturing, distribution, and waste generation threaten the masterbatch market. In addition, end-use industries such as packaging, consumer goods, textiles, and transport generate a large volume of plastic waste annually. Thus, government regulations are becoming strict, and rules are promoting biodegradable masterbatches substitute altogether.

Although this will promote the emergence of niche bio-based and sustainable masterbatches solutions, high revenue-generating conventional masterbatches will be cannibalized by the sustainable masterbatches. While bio-based and bio-degradable masterbatches require less production energy and produce less waste and pollution, the carbon emissions during manufacturing are comparable to conventional masterbatches. Thus, the factors mentioned above hinder global market expansion.

Market Opportunities

Increasing Technological Advancements

Increasing technological advancements in the field of masterbatches have resulted in an increase in the adoption rate as well as an increase in demand in the masterbatch market. Biodegradable, bio-based masterbatches provide environment-friendly solutions and have better structural properties. With the help of additives, they offer better quality and longevity of the product. Thermally stable masterbatches and custom-colored masterbatches are also a part of these advancements.

In addition, increasing demand for sustainable masterbatches has been witnessed globally, leading to increased R&D investments. These investments aim at developing masterbatches that can sustain higher temperatures and rougher surrounding conditions. Growing economies such as India and China have shown an immense increase in demand for sustainable masterbatches. Furthermore, countries such as Germany, Canada, and the U.S., with comparatively high incomes, offer a greater adoption rate of sustainable masterbatches. Such countries could boost the demand for sustainable masterbatches in several applications, such as packaging, aircraft, and automotive. Thus, these factors lead to significant growth opportunities for vendors in the market.

Regional Analysis

Based on region, the global masterbatch market is bifurcated into North America, Europe, the U.K., Asia-Pacific and Japan, China, South America, and the Middle East and Africa.

China Dominates the Global Market

China is the most significant shareholder in the global masterbatch market and is estimated to exhibit a CAGR of 8.07% during the forecast period. China has been one of the largest markets by region for conventional as well as sustainable masterbatches sales in terms of volume. The nation is a global leader in manufacturing polymers, other plastics, and masterbatch-related products. Similarly, the country has adopted bioplastics and biodegradable plastics for various processes in each sector to a great extent. Hence, it is a leading consumer of a wide range of masterbatch solutions. Furthermore, heavy investment in research and development provides enormous growth opportunities for the advancement of the market. China also has numerous patents by companies and universities, aiding in developing masterbatches. Therefore, the market has reached a saturation point where any new company investing in the sustainable market has a scope to grow only if it brings a market-changing technology or product into the market.

Europe is anticipated to exhibit a CAGR of 6.33% over the forecast period. The countries dominating the Europe region for the growth in the sustainable masterbatch market are Germany, France, Belgium, Italy, and some other European countries. These countries significantly contribute to adopting and manufacturing novel technologies and products for masterbatches. The inclination toward adopting eco-friendly masterbatch technologies apart from conventional masterbatches is expected to boost the masterbatch industry. In addition, several companies are offering sustainable masterbatches apart from petroleum-based masterbatches. According to PlasticsEurope, 60% reuse and recycling of all plastic packaging in the European Union is expected to be made mandatory by 2030, and 100% reuse, recycling, and recovery by 2040. This is expected to boost the overall market in the long run. Further, the European Union has set a target for reducing CO2 emissions by 15% by 2025, which has paved the way for masterbatch evolution.

North is a leader in the manufacturing, technology development, distribution, and marketing of masterbatch solutions. The region is among the leading consumer and producers of plastics. North America's plastic resin production and sales increased, boosting the demand for masterbatches. The automotive industry in the United States and Canada is predicted to experience increased demand for packaging, a significant factor in the region's rising demand for masterbatches. Moreover, the growing awareness about the environmental impacts of conventional plastics leads to the rising usage of eco-friendly masterbatches apart from conventional masterbatches. Significant manufacturing giants such as Cabot Corporation, Avient Corporation, and Ampacet Corporation are also responsible for ensuring the uninterrupted supply of products in the region to various end-use industries.

South America currently has a lower share than other regions in markets. This is a result of lower adoption rates and production capabilities of masterbatches. The countries dominating the region for the growth in the masterbatch market are Brazil and Argentina. South America's sustainable masterbatch manufacturing industry benefits from the budding demand for cleaner solutions and biodegradable plastics. Therefore, research and innovation are being promoted, further expected to boost the market in the foreseeable future.

The Asia-Pacific and Japan market is predicted to grow at a low-moderate rate over the forecast period. With increasing demand from various end-user segments, such as packaging, automotive, consumer appliances, and electronics, growth in the market is expected. In addition, the burgeoning demand for high-quality and low-environmental impact products is inciting the need for sustainable masterbatches. Increasing investment in research and development of bio-based and recycled masterbatches opens the opportunity for sustainable masterbatch manufacturers.

The United Arab Emirates, Saudi Arabia, Israel, Iran, Turkey, and South Africa are significant Middle Eastern and African nations. The usage of bio-based and biodegradable masterbatches in the end-user industries has been developing rapidly in some countries, such as the U.A.E., Israel, Turkey, and South Africa. This has led to growth in demand for sustainable masterbatches in the region. However, the overdependence of the Middle East and Africa on conventional or petroleum-based masterbatches has hindered the market penetration of sustainable masterbatches in the region. Furthermore, there is a lack of investments in the development of technologies owing to high import duties and irregular power supply in countries such as Kenya, West Africa, Congo, and South Africa, which is expected to act as a barrier to the adoption of masterbatches within the region.

Segmental Analysis

The global masterbatch market is bifurcated into the product, substrate type, state of the product, and end-user.

Based on product, the global market is divided into color masterbatch, additive masterbatch, filler masterbatch, and special effect masterbatch.

The color masterbatch segment accounts for the largest market share and is anticipated to exhibit a CAGR of 5.64% over the forecast period. The color masterbatch segment is further sub-segmented into black, white, and color masterbatches (apart from white and black). White masterbatches are used where opacity, brightness, and whiteness in the finished goods are required. White masterbatch is primarily made up of 70-80% titanium dioxide. Titanium dioxide has an ideal particle size range of 0.19 to 0.22 microns, is opaque, and has a high refractive index.

Black masterbatch is composed of 50% black pigment component. Black masterbatches are compatible with both injection molding and blow molding processes. Color masterbatches impart color (apart from white and black) to the plastic and rubber-based products, maintaining thermal stability and lightfastness. Color masterbatches find their application in a wide range of applications, such as injection molding of household items and insulation of cables, blow molding of bottles, and other hollow objects.

Based on substrate type, the global market is bifurcated into polyethylene terephthalate (PET), polyhydroxyalkanoate (PHA), polyolefins, polylactic acid (PLA), and others.

The polyolefins segment dominates the global market and is projected to exhibit a CAGR of 4.68% over the forecast period. The polyolefins segments are further sub-segmented into polyethylene (PE) and polypropylene (PP). One of the most widely produced and used plastics worldwide is polyethylene (PE), a thermoplastic with a lightweight composition. This plastic is highly recyclable and has a low cost of recycling as well as maintenance. Moreover, it is durable and has good structural strength. Polypropylene (PP) is a petrochemical-based polymer that requires the least energy for production and has the lowest CO2 emissions compared to its other counterparts. The plastic can be recycled multiple times before it loses its structural integrity. It is easily identifiable by NIR equipment, which makes it easier to sort and recycle.

Based on the state of the product, the global market is divided into solid and liquid.

The solid segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 6.79% over the forecast period. Solid masterbatches are primarily made of plastic, elastomers, and rubber in pigments and additives bonded to a compatible carrier material. Solid masterbatch dominated the market owing to the rising demand for plastic as an alternative for many raw materials such as metal, concrete, and steel in the automotive, consumer goods, electronics, construction, and packaging sectors. Avient, Ampacet, Penn Color, Sukano, and Gabriel-Chemie are some companies offering solid masterbatches.

Based on end-user, the global market is bifurcated into consumer goods, automotive, electrical and electronics, infrastructure and industrial, packaging, and others.

The packaging segment owns the highest market and is predicted to exhibit a CAGR of 5.43% over the forecast period. Plastics have had extensive usage in the packaging industry, and masterbatches help the sector to add aesthetic value to the finished goods. Raw polymers use masterbatches to ensure desired properties such as strength, color, and toughness. They are essential for ensuring the additional properties required by the plastic to be molded into different shapes and sizes. In addition, sustainable masterbatches such as Bio-PET and Bio-PP masterbatches are preferred for manufacturing printable films and packaging films by extrusion method. UV-resistant properties can be added by adding TPU masterbatch in biopolymers to create UV-resistant, sustainable masterbatches. Production of bottles, caps, films, and containers is the largest consumer segment for sustainable masterbatches.

Recent Developments

• April 2023- Ampacet, a global masterbatch pioneer, introduced ELTechTM Orange 2003 PBT, a masterbatch created exclusively for high-voltage orange PBT electrical and electronic devices.
• March 2023- Gerdau Graphene introduced the first commercially available graphene-enhanced PE masterbatch for plastic packaging and other applications. The additive masterbatch Poly-G PE-07GM is suitable for extruding films, profiles, and sheets.