World engineered plastics market is forecast to exceed 20 mln metric tons by the year 2015, according to New Report by Global Industry Analysts, Inc. Restoration of health to most end-use markets, especially the automotive sector as a result of government stimulus packages will aid in the market’s recovery. Engineered plastics represent one of the most ubiquitous raw materials used in a wide gamut of industries ranging from construction, automotives, industrial manufacturing equipment, to mechanical engineering. Given its omnipresent use, the recession and the financial crisis eroded the market’s health, especially during the years 2008 and 2009. The complete meltdown of the real estate, housing and construction industry resulted in cancellation, postponement, and general weakness in new office, commercial and residential building projects as a result of lack of credit and rising vacancy rates. Depreciation in home values, decline in new housing starts, crumbling consumer confidence, rising levels of unemployment, and reduction in household wealth, among others, resulted in adversely impacting residential building construction spends. All of these factors negatively impacted demand for engineering plastics in the construction/buildings end-use. The automobile industry, one of the most important end-users of high-end engineered plastics, was also one of the worst hit industries by the recession with automobile production and sales nose-diving. Plant closures, capacity idling, scaling back of operating capacity in the auto industry sent ripples of broad based declines across all of the upstream raw material markets including engineering plastics. The sprawling electrical and electronics and consumer appliances industry also succumbed to the inescapable symptoms of the recession, such as, lower discretionary spends and the ensuing weak consumer demand for personal computers, cellphones, notebooks, PDA, game consoles, digital music players, cameras, heaters, refrigerators and laundry equipment, among numerous others. With the level of economic activity slowing down, the recession has made a disproportionate impact on industrial production as a result of reduced manufacturing and commercial activity. Manufacturing output declined resulting in broad based declines in demand for industrial equipment and machinery thus impacting demand for engineering plastics in this space. In the aerospace industry, commercial aerospace has been especially roughed up with the general aviation industry witnessing significant erosions in business prospects, such as decline in air travel, reduced number of flight trips, cancellation of new aircraft orders, postponement of new aircraft deliveries, liquidity crunch, rise in airline bankruptcy, airline consolidation and reductions in airline fleet. All of these factors have triggered a decline in production and shipments of passenger and cargo aircrafts, and aircraft parts and components like engines since commercial aircraft manufacturing is directly tied to the health of the airline industry. As a result, demand for engineered plastics in the aerospace industry thus took a hurting blow. Europe and Asia-Pacific account for a lion’s share of the global Engineered Plastics market, as stated by GIA’s market research report. Future growth will be driven by the need to replenish depleting inventories in the supply chain as a result of resurging production activities on wings of improving end-user demand after two years of stagnation. Continued shifting of global production bases to low cost Asian countries, increase in foreign investments, and rise in the number of new manufacturing establishments will witness Asia-Pacific emerge into a prime driver of growth for engineered plastics. China and India will especially emerge over the global horizon to drive growth in the medium to long-term period. The already expanding automobile demand in these countries, following a fleeting deceleration in growth, stands testimony to the potential laden opportunities in these markets. In short, resurgence in fundamental growth fundamentals across all end-use markets, such as, rebuilding of consumer/business confidence, recovery in GDP growth, employment rates, incomes levels, discretionary incomes, consumer spends, rebound in general production, manufacturing and trade, rise in capital investment levels in all end-use sectors, improvement in liquidity situation, will reemerge to reshape growth in the battered marketplace. Growth in the polycarbonate market is driven by expanding applications in motor vehicles, construction, medical products, in addition to increased use of polycarbonate in combination with other plastics. As economic health begins to align with environmental health, the automotive industry will witness a distinct re-focus on functional and performance materials like engineering plastics capable of reducing automakers’ carbon footprint. Focus on reducing vehicle weight for greater fuel efficiency and lesser environmental impact will spur demand for innovative lightweight, yet strong fracture resistant automotive plastics. Fuelling this trend will be the tightening of emissions related regulations. Lightweight composite nylon resins will therefore find increased adoption in automotive under-the-hood applications as manufacturers shift towards engineered plastics such as nylon 6 or nylon 66 in attempts to decrease weight, lower costs, and obtain design flexibility in architecture. Demand for Engineered Plastics in Automotive Applications market in Asia-Pacific is expected to surge at a CAGR of 5.0% during the analysis period. Major players in the global marketplace include BASF SE, Bayer AG, Chi Mei Corporation, Dow Chemical, DuPont, Eastman Chemical Company, Evonik Degussa GmbH, LG Chem, Polyplastics Co., Royal DSM NV, SABIC, Ticona Engineering Polymers, Teijin Limited, Toray Industries Inc, and Wintech Polymer Ltd. Engineering plastics refer to those materials that can be used as structural stuff, can endure the mechanical stress in a wider range of temperatures, and can be applied against relatively harsh physical and chemical environment. As per Research and Markets, in 2008, the world’s demand for engineering plastics reached 8.89 mln tons, but it fell to some extent in 2009 due to the global economic recession; fueled by the recovering demand of automobile and electronic & electrical products in 2010, the demand for engineering plastics registered 8.79 mln tons, close to that in 2008, and promisingly, it will rise 30% from 2010 to 11.43 mln tons in 2015. The consumption of engineering plastics is centralized in developed countries and regions which characterize comparatively high market saturation and therefore saw the limited market growth margin in 2010. However, the demand for engineering plastics in emerging markets and regions is booming, with the growth margin of over 10% in 2010; hereinto, that in Chinese market approximated 2.50 mln tons, up 11% year-on-year. Polycarbonate, polyamide (PA) engineering plastics and polyoxymethylene, are the Top 3 by demand, as examples: Polycarbonate: Polycarbonate is widely applied in hollow plates, safe lampshades, signal lamps, automotive instrument panels, bumpers, shells of electric tools, optical disk drives, etc. The polycarbonate consumption in Chinese market has increased rapidly in recent years, with the apparent consumption climbing to 1.20 mln tons or so in 2010 from 620,000 tons in 2005, the CAGR of 14%, and the market size of about RMB30 bln. Production of polycarbonate in China develops slowly, the net import volume contributed more than 75% to the demand during 2005-2010, and the manufacturers are mainly foreign-funded enterprises, wherein, the total capacity of TEIJIN and Bayer hold a proportion of 95%. PA engineering plastics: PA engineering plastics are extensively employed in automobile and transportation industries, with the typical products such as pump impeller, fan blade, valve seat, bushing, bearing, instrument panels, automotive electrical instruments, and the like. In 2010, the demand for PA engineering plastics in China approached 410 kilotons, nearly the quintuple of 83.2 kilotons in 2000. Apart from such foreign-funded enterprises as LANXESS, BASF and DSM, the Chinese PA engineering plastics manufacturers consist of Zhong Ping Energy Chemical Group whose annual capacity is 125,000 tons and ranks the first in Asia. Polyoxymethylene: Polyoxymethylene is mainly for high-precision gears, instrument fine parts with complicated geometry, water taps, gas explosion pipeline valve, etc. The demand for polyoxymethylene in China was roughly 330 kilotons (net import volume: 166 kilotons) in 2010, up 15.8% YoY, and the production of Polyoxymethylene in China keeps rapid growth during the recent years. The capacity of domestic enterprises took 72% of the 250 kilotons in 2010, of which, China’s YUNTIANHUA Group enjoyed 90 kilotons, and China National BlueStar (Group) Co., Ltd. and Henan Coal Chemical Industry Group (HNCC) held respectively 40 kilotons. US demand for engineering plastics will rise 3.1% pa to 5.4 bln plbs in 2012, valued at US$10.7 bln, as per Freedonia. Gains will represent a notable acceleration from performance during the 1997-2007 decade, in which a slowdown in motor vehicle and electronics output resulted in sluggish growth in engineering plastics demand. Advances will be driven by a continued trend toward the replacement of metal parts with high-performance plastic resins, which feature advantages such as reduced weight, lower costs and increased durability. ABS, polycarbonate and nylon will continue to be the three largest volume engineering plastics, accounting for over three-quarters of total demand in 2012. Of these, the most rapid advances are expected for polycarbonate resins, driven by opportunities in motor vehicles and medical products. ABS demand, on the other hand, will grow at a pace well below the overall average, restrained by market maturity and competition from commodity resins such as polypropylene. Frost & Sullivan’s report provides the current status of the engineering plastics market in Latin America. Sustained growth in the industrial sector and the growing utilization of high-performance plastics in some applications are the major forces driving the Latin American engineering plastics market. Notwithstanding the impact of the economic downturn, the market is expected to become more competitive, opening up new avenues of opportunity for key participants and new entrants. “Engineering thermoplastics are sold in much lower quantities and are thus more expensive per unit weight than commodity plastics; the applications are more specific and niche products are constantly required by the end-users,” notes the analyst of this research service. “The Latin American market for engineering plastics is considered to be in an early mature stage since it already has many possibilities to grow through new applications.” Differentiating the product offering and providing optimized performance are the two major areas on which participants must lay particular emphasis. In Latin America, the main end user for engineering plastics is the automotive industry, followed by the electronics sector. The automotive sector registered impressive growth rates in Latin America during 2008 – 14.5% in 2008 for Brazil, representing 6% of the Brazilian GDP in 2008, and 8% in Argentina. As plastics have the advantage of being cost effective, versatile, and lighter than competing materials, they facilitate cost savings in many applications, particularly automotive parts. Despite the fact that engineering plastics have extensively replaced metals in Latin America, the focus on metal replacement is still a prominent factor influencing market dynamics. End-users are applying engineering plastics instead of commodity plastics for products that require better materials performance. The automotive and electronics segments are constantly seeking new ways for product improvement, for instance, replacing polypropylene (PP). Commodity plastics have been replaced by ABS, which is priced lower than other engineering plastics and has enhanced properties for greater performance. However, cost reduction is at the crux of the short term strategy for the Latin American engineering plastic market participants. During 2008, oil prices had climbed to US$150 per barrel, heavily affecting the engineering plastics market. Latin America imports a sizeable portion of plastic resins and increasing prices encouraged substitution by commodity materials. Companies are aiming to reach new markets and applications in the medium and long term, so as to not be so dependent on the automotive industry,” notes the analyst of this research service. “However, technical developments and partnerships to develop a new application can take anywhere between six months to two years.” Innovative applications can expand the range of markets where engineering plastics are applied, unleashing prospects for penetration in diverse markets. Participants must be attuned to the subtle nuances of the market, identify the needs of major consumers, and work toward finding newer, more potent solutions to ensure business progression.