Plastics Materials and Resins
SIC 2821
NAICS 325211
Global plastics makers manufacture various synthetic resins and plastics that other industries process into sheets, rods, film, and other products. Related industries include plastic products, synthetic rubber, and man-made fibers.
Synthetic plastics were pioneered in Europe and the United States during the late nineteenth century and were produced commercially by the early 1900s. The industry expanded rapidly with the development of improved plastic materials. The United States assumed global industry dominance following World War II and continued to lead the production of plastics in the early 2000s. However, its share of the global market fell after the 1950s as manufacturers in both industrialized and developing nations boosted output. Plastics output is traditionally about equal to domestic consumption. Plastics and resins constituted a significant portion of the patents issued in the overall chemical industry.
World plastic production ballooned from 63.5 million metric tons in 1982 to more than 150 million in 1998. Although growth has been uneven across regions and years, the industry's long-term outlook remains decidedly positive, especially in emerging economies, as plastics are increasingly substituted for other materials in applications ranging from transportation and construction to packaging and consumer products. Japan, Western Europe, and the United States continued to lead output at the beginning of the 2000s, but low-cost producers of commodity plastics in developing regions amassed a rising share of world production by 2005, especially as economic growth accelerated in China.
One leading issue across national boundaries was environmental pollution, which sparked a wave of legislation and other initiatives to reduce toxic wastes resulting from plastics production as well as to control the amount of plastic consumed and disposed. These concerns motivated—and in some cases required—industry participants to recycle plastic and develop less toxic and biodegradable plastics. Among the primary targets was PVC, used extensively in the construction industry as well as in packaging. Though environmental campaigns resulted in several companies agreeing to eliminate PVCs from their products, U.S. output of PVCs actually increased in 2004 by 8.8 percent, reaching a total of 16 billion pounds.
Plastics are giant polymers—long-chain molecules that contain thousands of repeating molecular units. Although some plastics are made from natural materials such as wax or cellulose, most are synthesized from petrochemicals or other organic substances. Because synthesized materials can be manipulated into an infinite variety of grades and types, they are important alternatives to natural materials in numerous applications.
Plastics manufacturing involves a three-step process: (1) synthesizing the polymer, usually from petrochemicals or coal-related processes (i.e., coal gasification); (2) compounding, which integrated additives; and (3) shaping, an activity not included in this industry classification. The physical properties of plastic can be altered at different stages of the production process, but the most versatile stage is during compounding. For example, additives, such as colorants, flame retardants, heat or light stabilizers, or lubricants may be added to the resin to achieve desired characteristics. The end result of the compounding process is resin, usually in the form of pellets, flakes, granules, powder, or liquid.
Plasticizers, the most common additives used to alter plastic resins, increase a resin's flexibility and are often used to make polyvinyl chloride (PVC) resins that can be utilized in construction products. Impact modifiers are additives that boosted a plastic's resistance to stress. Likewise, antioxidants retard the oxidation and breakdown of plastics, and heat-stabilizing additives help resins maintain their physical structure during processing. Light stabilizers filter out radiation that can cause a plastic to deteriorate as a result of exposure to sunlight and flame-retardants enable resins to resist combustion. Colorants are another major additive used in the compounding process. Aside from additives, fillers or reinforcement such as glass fibers, particulate materials, and hollow glass spheres can also be added during compounding. Another option is to combine polymers to create a polymer blend or alloy.
Thermoplastics and thermosets are the two main classes of plastics. Thermoplastics account for the bulk of industry output. They solidify by cooling and are repeatedly remelted to form new shapes. The major thermoplastic resins are: polyethylene (PE), used primarily to create packaging; PVC, commonly consumed in the manufacture of pipes, siding, gutters, windows, and other goods utilized in construction; polypropylene (PP), used to create fiber and filaments, molded consumer products, and packaging; and polystyrene, which is formed into disposable packaging, furniture finishings, and miscellaneous consumer products. Other thermoplastics segments include polyamide resins, styrene-butadiene, and some polyesters.
According to U.S. Thermoplastic Elastomers, news analysis from Frost & Sullivan revealed that this market generated revenues of US$1.29 billion in 2003, and is likely to reach US$1.72 billion in 2010.
Thermosets are a smaller, more mature, and less dynamic division of the plastics industry. In contrast to thermoplastics, thermosets harden by chemical reaction and cannot be melted and shaped after they are created. Typical thermosets include phenolics, which make adhesives, insulation, laminates, and other related goods; urea-formaldehyde resins, commonly used in the production of plywood and particle board; epoxies, often used as metal coatings in packaging and construction; and polyesters, used to create plastics reinforced with glass fiber and other materials.
Plastics resins span four major commercial divisions: commodity, intermediate, engineered, and advanced. Commodity resins, which represent the bulk of industry production, are low-tech plastics available in standardized formulas from many companies throughout the world. Intermediate resins are generally considered more advanced and somewhat specialized in comparison to commodity resins. Likewise, engineering resins exhibit more advanced performance characteristics and are produced on a smaller scale than commodity and intermediate resins. Finally, advanced resins are those most capable of withstanding impact and high heat, carrying loads, and resisting attacks by chemicals and solvents.
Partly because of technological requirements, the global plastics industry is dominated by major industrial powers. As a whole, North America, Japan, and Western Europe accounted for more than 80 percent of the industry output and around 60 percent of plastics use in the 1990s, though by 2005 growth in developing Asian markets's plastics industries outpaced that in North America and Europe. The output of plastics was roughly equal to domestic consumption in most nations, although industrialized countries tended to be net exporters. The United States, Japan, and Germany together consumed and produced slightly more than 50 percent of this output in the 1990s; the remainder of the market was widely distributed. Aside from technical expertise related to the production process, manufacturers in those countries benefited from immediate access to most of the companies that purchased and processed plastics and resins.
In general, commodity resins have been manufactured by large, integrated companies in industrialized regions, although a rising share of production occurs in emerging economies such as those of Southeast Asia. Intermediate, engineered, and advanced resins are more likely to be manufactured (and consumed) in developed nations, sometimes by smaller manufacturers with expertise in this niche. Industry profitability in each nation is closely linked with both global plastics prices and domestic economic performance; when other industries, such as construction and motor vehicles...
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