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5 February, New York, USA, 2021 – According to the United States Census Bureau, the retail e-commerce sales in the United States continue to skyrocket, and reached $209.5 billion in the third quarter of 2020. In the third quarter of 2020, e-commerce rose by 36.7% from the previous year. Moreover, these sales reached a record high of 14.3% of total sales. The increase in total sales amounted to 6.9% from previous year. E-commerce remains the key drivers of polyethylene foams which are widely used in packaging goods.
The rising demand for e-commerce and growing expansion of packaging sector will drive the Polyethylene foams market to reach USD 5.1 billion by 2025. Moreover, the market stood at $3.1 billion in valuation in 2020, and will rise at 6.73% CAGR during 2020-2025 periods. Rising demand for packaging services in US, Europe, and new expansion of e-commerce in countries like India, China, Southeast Asia, Mexico will present lucrative growth opportunities for players in the polyethylene foams market.
Rising Manufacturing Activity Promises Major Boost for Growth
As the covid-19 crisis subsides, thanks to the vaccination promise, the growth of manufacturing continues to pick up pace in United States. For example, according to the US Census Bureau, the new orders for manufactured goods increased by $5.2 billion in December 2020, rising to $493.5 billion. Furthermore, this followed a near eight-consecutive month increase, with a 0.8% increase from November. Moreover, the ratio of unfilled orders to shipments still lies in the favor of packaging players, as it stood at 6.28% in December, down from 6.40%. Furthermore, the value of shipment for plastic, and rubber products also continues to witness promising growth in United States, thanks to growing demand for e-commerce. The increase in value for shipments remained a robust 7.3% on average for manufacturing industries across the board.
Automotive Sector to Promise Major Growth as Electric Vehicles Pick Up Pace
According to the International Energy Agency, over 9 million American consumers delayed their vehicle purchase in 2019. This is likely due to financial difficulties, and also promising vehicle prospects like electric vehicle. The electric vehicle promise significant fuel savings for consumers. Moreover, countries like UK have announced plans to completely end use of conventional vehicles in the future. Hence, there is a significant uncertainty in the US market. However, carmakers like Tesla have registered over 30% increase in sales amidst the coronavirus pandemic. Furthermore, the growth affected by pandemic also seems to be on the rebound. For example, over 90% auto component manufacturing companies surveyed in 2019 reported that their sales were down. However, in 2020, the growth for heavy-trucks, tractors, and expansion in new regions like Asia Pacific continues to drive growth for players in the polyethylene foams market.
Rising Construction Activity to Remain Largest Application for Revenue Growth
The polyethylene foams are widely used in the construction sector for pipe-in-pipe, forging, roof board, door, and slab-related applications. These foams are considered ideal for thermal insulation, sound, vibration, moisture resistance, and absorption properties. According to a 2019 US department report, the US has committed funding for global infrastructure initiatives like blue dot network to attract more capital into emerging markets. Furthermore, the move is similar to China’s Belt & Road initiative which likely result in trillion-dollar newly built roads, bridges, and buildings in emerging nations. Similarly, Indian finance minister recently announced over $1 trillion in funding for domestic infrastructure in 2019. The rising initiatives to develop infrastructure around the world will remain a major driver of growth for players in the polyethylene foams market.
Raw Material Prices Remain a Key Concern in the Polyethylene Foams Market
The volatility in the prices of polyethylene foams remain a key concern among manufacturers. The key raw material for these products includes naptha, LDPE or low density polyethylene resin, and high density polyethylene, and additives. On one hand, the processed nature of these raw materials make them hard to come-by, and pricey to begin with. On the other hand, main raw materials like oil for these products have remained volatile in supply over the last few years. The growing demand for polyethylene foams will likely require a more stable, and robust supply in the near future to ensure maximum growth for players in the polyethylene foams market.
Growing Availability of CO2-Base Polyols Remain a Promising Prospect
The growing advancements in plastic polymers have led to increased architecture to drive growth of the polyethylene foams. For example, CO2-based polyols are expected to replace petroleum based products, thanks to growing replacement of cheaper raw material, and alternatives. These new products offer promise on the sustainability front also, driving more niche application in areas. The petroleum-based products were well-known for their high-duty requirements on land resources. The growing sustainability can provide further boost for the polyethylene foams market with favorable legislation scenario.
Cross-Linked polyethylene Products Likely to Drive Largest End-application
XPLE, or cross-linked polyethylene remain a promising driver of growth , thanks to their resistance to water. The growing demand from online delivery companies for packaging, and growth of e-commerce will drive major growth for this segment in the near future. The product also promises to protect class A surfaces, that are seen, and touched in the consumer world. The rising demand for medical products like disposable diapers, sanitary napkins, medical wraps, will also remain key to growth for players in the polyethylene foams market.
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