Plastic demand: sectoral overview

Plastics are everywhere. From packaging to clothes, homes to offices, hospitals to farmers’ fields, few products are as useful or ubiquitous. Yet, demand for virgin plastics are at risk.  as more regions push for bans on single-use plastics, incentivising reuse and substitutions. Rising concerns over the environmental impact are driving industry innovation for circular solutions to enable the Materials Transition that are expected to impact demand for virgin plastics.  
 
Despite this slowdown, plastics remain critical to modern society. Textiles and apparel, transport and consumer products account for large shares of plastic demand. The quantity of plastics used in textiles and single-use packaging is somewhat mind-blowing. However, the global move away from fossil-derived materials is likely to put pressure on even the most dependent industries in the coming years. To find out more about the outlook for global plastic demand, including information and charts on the packaging industry, and more about transport, textiles and construction, fill in the form to download the full report. 

Transportation         

Plastics are the second most used material in vehicles after metals, and are found in multiple parts, from bumpers and battery casings to lighting systems. The recent electrification trend within the transport sector is boosting demand, as producers aim to offset the weight increase of EV batteries with lighter plastics. It’s worth paying attention to this use case: by 2040, Wood Mackenzie forecasts that electric vehicles (EVs) will account for 60% of global passenger vehicle production.  

This is an interesting instance of the environmental regulations and consumer behaviour increasing demand for plastic.  

In the longer term, virgin polymer demand may be disrupted by legislative mandates around end-of-life vehicles, coupled with increased use of recycled plastic in production.  

Single-use primary packaging 

 Woodmac’s Materials Application Platform (MAP) focuses on three major categories: films (flexible food packaging), bottles and other rigids. A regional demand forecast is then developed from these.  

Our analysis shows that bottles are the highest mechanically recycled segment: perhaps surprisingly, more than half of the world’s PET bottles were recycled in 2023. Legislation like the Packaging and Packaging Waste Directive (PPWR) has specific targets, including bottle bans, which will further impact polymer demand. The chemical recycling ecosystem will have a significant negative impact on the flexible food packaging industry, too. And as recyclability mandates come in, multilayer flexible packaging will fade out and we will see more mono-material packaging.  

Textiles and apparel 

As populations grow in Africa and India, we can expect an initial surge in total demand for textiles. However, while emerging economies bring an increasing number of consumers with spending power, sustainability initiatives will surely follow. Fibre markets are volatile and uncertain and bound up with geopolitical tensions. Regulatory changes may disrupt supply chains in the quest to improve sustainability, and consumer behaviour is changing, too. Emission reduction strategies and zero waste targets may increase costs, again impacting demand. 

Construction

The construction industry accounts for 15% of total polymer demand, but growth has slowed recently. The sector’s post-pandemic recovery was stalled by increased inflationary pressure and the year of rising interest rates. Construction has also faced rising material costs, increased lead times in procuring materials due to supply chain problems, and labour shortages in developed economies. Again, growth is expected in developing economies such as India, Vietnam and other Asian countries where populations are increasing, and there is strong investment in infrastructure.  

Plastic demand is a complicated picture characterised by conflicting pressures. Around the world, countries are trending away from single-use plastics, but plastic use continues to be essential in some industries. As sustainability, environmental impact and carbon emissions concerns grow, there is increasing pressure on developing innovative circular and sustainable alternatives for plastic products which could impact demand for fossil-based materials.  

To learn more about the outlook for global plastic demand picture, including information and charts on the packaging industry, and more about transport, textiles and construction, fill in the form to download the full report.