Gloval Market Outlook on Rigid Plastic Bottles
Growth in APAC is expected to become stronger in the next five years. Emerging markets are observed to focus on low cost packaging, while developed regions focuses on new sustainable materials and innovative blow molding technologies
- Blow molded plastic market was valued around $75.6 billion in 2016 and is expected to grow at a CAGR of 4.5-5 percent and reach $90.9 billion by 2020. Value growth is expected to be driven by growing product advancements
- APAC is expected to witness significant growth of around 7-8 percent CAGR, and contribute around 36 percent of global rigid plastic bottles demand by end of this decade
- North America and Europe being matured markets are expected to grow below industry average which is 2.7 percent and 2.6 percent CAGR respectively. Increasing penetration of sustainable packaging in cosmetics sector has resulted in increased preference of bio-plastics and PCR resins in developed regions
- Increased spend of disposable income on cosmetics due to Gen-Y entering the job market have become a major driver for increased plastic bottle consumption in Cosmetic sector
Replacement of glass bottles by PET by thick walled containers and PETG containers is predominantly observed in cosmetics industry due to cost and logistic advantages. Buyers can identify suppliers with these capabilities to migrate volumes
- Food and beverages are the major end use industries of blow molded plastic bottles, contributing around 62 percent of total consumption. The remaining 21 percent is almost equally shared among Cosmetics, Pharmaceuticals and Personal care sector
- The cosmetics industry contributed 6 percent of blow molded bottles consumption in 2016, and is expected to grow at a CAGR of 4-5 percent in the next five years in value terms
- Rigid plastic bottle demand in the cosmetic sector is currently valued at $4.5 billion. Cosmetic bottles below 50 ml in capacity is expected to secure a market share of 30 percent by 2020
- Growth of skin care segment (4-5 percent from 2017-18) due the to increasing demand in sun care and anti ageing products followed by fashion conscious hair styling product (3-4 percent from 2017-18) is further expected to increase plastic bottle consumption of the cosmetic sector to $5.3 billion by 2020
Major Trends in Rigid Plastic Bottles
Technologically packaging industry is moving at a fast pace. In the next five yeas, better sustainable solutions with high rigidity, low resin consumption could be made possible with the advanced technologies. However, to achieve economies of scale, buyers might consolidate volumes with the top players with strong investment powers
- Blow molding technologies like gaseous molding, foam based molding etc. facilitate high rigidity in light weight bottles is likely to penetrate faster in the market in the next five years. In mold labelling is also expected to gain popularity in the emerging region, with new innovations incorporating blow molding with in mold technologies.
- The anti-counterfeit packaging market size is set to grow from $82 billion in 2015 to reach $153 Billion by 2020 at CAGR of 13-14 percent
- Major demand of anti counterfeiting products are coming from developed markets like North America, Europe as proper guidelines have been laid down in these markets and the markets are well equipped to implement the changes
- Light weight plastic containers weigh 8-12 grams lesser as they contain 25 percent less plastic than the regular plastic bottles.For Example: Amcor has developed one of the lightest bottle without compromising on strength. This was designed for PepsiCo -Sport drink(Gatorade). More manufacturers are expected to follow this trend in the near future.
HDPE Price Forecast
- US: HDPE contract prices for December witnessed a decrease of $22/MT to reach $1580-1595/MT. The decrease in prices could be attributed to the end of peak demand from construction and packaging sectors. The US HDPE prices fell marginally due to the steep increase in feedstock ethylene contract prices by 6.6 percent. Ethylene-HDPE spread was~$880/MT and is expected to decrease further by $30/MT in January 2018. Q1 2018, HDPE prices are expected to increase by 5-6 percent
- Europe: HDPE prices were estimated to be €1,360-1,380/MT, a decrease of 2.1 percent on a M-o-M basis. The spread between ethylene and PE is estimated to be ~€420-430/MT and is expected to marginally increase in January 2018. Q1 2018 HDPE prices are expected to decrease by 4-5 percent
- Asia: December HDPE prices were estimated to be $1,130-1145/MT an decrease of 0.5 percent on M-o-M basis. This can be attributed to subdued demand and destocking activities. The manufacturing PMI in Asia increased in all major sectors, however it didn’t have a major impact on the PE prices. The spread between ethylene and PE in December is estimated to be ~$20-60/MT and is expected to marginally increase in January 2018.