Business is booming in the polyethylene industry. Thanks to the ability to produce this versatile, recyclable polymer inexpensively, the value of the United States PE industry is forecasted to be $21.3 billion by 2022.¹
It’s clear the demand for this substance isn’t letting up any time soon, so we’ve identified three trends that PE converters, manufacturers, and suppliers should watch as they make supply chain decisions in the coming year.
1. Global Demand Growth
The PE industry is flourishing and global projections by Global Market Insights expect a 6% compound annual industry growth rate between 2018 and 2023. That means this boost will result in a ~215 billion global valuation at the end of this term!2
Linear low-density polyethylene’s (LLDPE) high tensile strength and puncture resistance have helped spur gains in multiple markets, including food and pharmaceutical packaging, which is why it comprises over 45% of total resin usage3. Above-average growth is also forecasted for high-density polyethylene (HDPE) and its value is projected to increase 35% by 2023 driven by rising use in construction products and the increasing popularity of blow-molded HDPE containers in emerging market countries.4
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2. Emphasis on the Customer Experience
As the polyethylene space becomes more influenced by players around the world, differentiation will be a top priority. Unfortunately, many polymer suppliers have been using business technology that hinders operational excellence and slows down key processes. This type of friction is a customer experience issue that may have a greater impact in years to come.
According to Gartner, more than two-thirds of companies in today’s world compete primarily on the basis of customer experience5. As usability and design are improved in the consumer space, procurement teams are expecting more from their B2B tools as well. That’s why PE companies at all levels of the supply chain should be thinking about how to streamline buyer-facing components of their business.
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3. Continued Demand For Film and Pipe
A wide variety of PE applications are multiplying their market share in 2020, and films and piping are no exception. Food packaging films will be in high demand because quality, multilayer barriers are needed to extend the shelf life of popular, preservative-free goods and reduce food waste6. Another booming industry — e-commerce — will also cause a spike for film that is used to secure goods in a warehousing and logistics.
When it comes to piping, a Freedonia industry study that analyzed the 19.3 billion-meter plastic pipe industry, is predicting a 6.7% growth rate7. Strong construction activity, especially in China and the US, will boost demand as plastic pipe is used in a variety of building applications. This is especially true because plastic’s performance, cost, and installation advantages will spur its use over other pipe materials like concrete, copper, and steel.
