The global high density polyethylene (HDPE) market is highly fragmented due to the presence of large number of regional and local producers. These regional and local players have a stronghold in local markets, making it difficult for global players to increase their market share. Transparency Market Research (TMR) has found that the three leading producers, namely INEOS Olefins and Polymers, LyondellBasell Industries, and Chevron Philips Chemical Company collectively accounted for 16.3% of the overall market in 2014. The aforementioned players have strong distribution chains in regions exhibiting high consumption of high density polyethylene market and demonstrate large plant capacities. It is expected that the degree of competition in this market will remain high even in the coming years, as regional and local players are trying to increase their footprint in the global high density polyethylene market. However, the threat of new companies entering into this market is expected to remain low, due to low provisions of raw materials required and high capital costs for building technologically advanced production plants.
Plastic packaging needs a large volume of the high density polyethylene as it is a core plastic in rigid packaging. Nearly 30% of the various materials used in packaging is high density polyethylene. This high demand is one of the key driver for the market. Furthermore, surge in consumption of consumer goods and food and beverages is expected bolster the packaging industry, further flourishing the HDPE market. Additionally, the rising significance of aesthetics in packaging industry is another factor helping the market to grow. They also find applications in the manufacturing of pipes. The soaring demand from the agriculture industry for pipes and films is therefore expected to assist the market growth. Additionally, the usage of HDPE in the manufacturing of UV protective tarpaulins and sheets is anticipated to increase the demand for high density polyethylene.
Fluctuating costs of raw materials used for manufacturing of high density polyethylene is a key concern for all the market players. For instance, large amount of ethylene is used for manufacturing of HDPE, due to overall scarcity of petroleum based byproducts, the market for ethylene is exhibiting fluctuating costs, reflecting its effects on the HDPE market. Furthermore, low thermal and mechanical properties and poor dimensional accuracy provided by HDPE could motivate manufacturers to opt for other alternatives such as polyethylene terephthalate. Nevertheless, major public health concern bodies have approved use of high density polyethylene for food packaging, which is expected to bolster the HDPE global market.
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