Asian masterbatch sector continues to grow

09-Feb-05

Demand for masterbatches in Asia has made rapid advances in recent years, reaching levels of 500,000 tons in 2004. Despite the 13% average annual increase, there is significant room for further growth. This average annual increase of 13% has taken demand from about 90,000 tons in 1990, to 300,0000 tons in 2000, reaching levels of nearly 500,000 tons in 2004. Over 90% of this demand is met by capacities in Asia. Besides demand from the region, another driver for growth is the need to produce ever higher colour standards for supply to markets in the West and Japan. South East Asia represents a highly diverse market for masterbatch products, with the individual markets ranging from the highly sophisticated and well developed such as in Singapore to the small, but rapidly developing ones like Vietnam. Markets are also very different in their adoption of masterbatch usage, with some countries continuing to have a significant use of dry pigments and compounds while others use masterbatch to a greater extent. Methods of colouring used by processors vary, depending on tradition, costs and availability. Masterbatch currently has a market share of 43% of the plastics colouring market in the region, so there is still plenty of scope for substitution of compounds and dry pigments. A study by AMI highlighted the rapid growth of the Chinese masterbatch market share. In 1994, China accounted for almost 23% of Asian demand, 31.8% in 1999 and almost 45% by 2003. However, with robust growth of the Chinese economy as well as teh palstics industry, the country has future potential. Currently, China's masterbatch market share lags its share of the total Asian market for plastics, which was 60% in 2003.