Frost & Sullivan releases 'Global and China PEEK Market Overview'

Plastic, as a material widely used in various industries, is modified based on the structure and properties of polymers. Whether natural or synthetic, polymers provide the basic framework for plastics, endowing them with plasticity, processability, and formability.

Special engineering plastics, as a type of high-performance plastic, are widely used in fields such as aerospace, automotive, and medical devices due to their unique chemical, physical, and mechanical properties. Based on their chemical structure and characteristics, special engineering plastics are divided into polyimides, polyarylethers, and fluororesins, each with its specific applications and advantages. For example, polyimides have excellent chemical corrosion resistance and wear resistance, polyarylether resins are valued for their thermal stability and electrical insulation properties, while fluororesins are widely used due to their high-temperature resistance and chemical resistance. These special engineering plastics not only hold an important technical position but also play a key role in the market and application fields.

Source: Frost & Sullivan research

Governments around the world are focusing on developing the special engineering plastics industry as a key area, with broad market prospects in the future. Special engineering plastics, with their excellent high-temperature resistance, chemical corrosion resistance, mechanical strength, and electrical insulation properties, can meet the demanding engineering requirements and application needs of industries such as aerospace and medical devices.

The global market size of special engineering plastics increased from 652 billion yuan in 2018 to 940 billion yuan by 2022, with an annual compound growth rate of 9.58% during this period. During the same period, China, as a global manufacturing center, has seen rapid development in high-end manufacturing such as aerospace, which has driven the demand for special engineering plastics. The market size of special engineering plastics in the Chinese market increased from 72 billion yuan to 135 billion yuan, with an annual compound growth rate of 16.9%. In the future, with the research and development of new special engineering plastics and the upgrading of production processes, the global special engineering plastics market will continue to develop rapidly. It is estimated that by 2027, the global market size of special engineering plastics will reach 1,382 billion yuan, with an annual compound growth rate of 8.01%; driven by policy support, a complete plastic industry supply chain, and product cost advantages, the Chinese special engineering plastics industry will achieve a market scale of 212 billion yuan at a compound annual growth rate of 9.53%, growing faster than the global level during the same period.

Source: Expert interviews, Victrex annual report, Frost & Sullivan research

With technological progress and innovation, global PEEK production enterprises have continuously made remarkable strides in technology research and development and innovation.PEEK materialThe performance and quality continue to improve, meeting the needs of more new application areas. The global PEEK market size increased from 3.6 billion yuan in 2018 to 4.9 billion yuan in 2022, with an annual compound growth rate of 8.01% during this period. Due to the severe impact of the COVID-19 pandemic in overseas regions in 2020, the overall demand for polyether ether ketone (PEEK) in the manufacturing industry decreased, leading to a downward trend in the PEEK market size. However, in China, due to effective epidemic control measures and the rapid development of high-end manufacturing industries such as new energy and semiconductors, the demand for PEEK has shown an upward trend instead of a decline.

The market scale of PEEK in the Chinese market increased from 800 million yuan in 2018 to 1.5 billion yuan in 2022, with a compound growth rate of 17.01%. Based on its outstanding performance, compliance with strict safety and environmental requirements, and enhanced competitiveness due to technological progress and cost reduction, polyetheretherketone (PEEK) will meet the growing demand for high-performance application scenarios. The global PEEK market scale is expected to increase to 8.4 billion yuan in 2027, with an annual compound growth rate of 11.38% during this period. By then, the production capacity of high-end manufacturing industries such as new energy, semiconductors, and healthcare in China will be further released, and the Chinese PEEK market scale is expected to increase by 13.30% annually to reach 28 billion yuan in 2027.

Source: Expert interviews, Victrex annual report, Frost & Sullivan research

The global market size of polysulfone resins increased from 5.5 billion yuan in 2018 to 6.6 billion yuan in 2022, with a compound annual growth rate of 3.37% during this period. Under the guidance and support of the 'Development Plan for the Petrochemical and Chemical Industry (2016~2020)' issued by the Ministry of Industry and Information Technology in October 2016 and the 'Catalogue of Industrial Structure Adjustment Guidance (2019 Edition)' released by the National Development and Reform Commission in November 2019, Chinese polysulfone resin manufacturers have invested a large amount of funds in technology research and development and innovation and made significant progress. Chinese enterprises have gradually achieved large-scale industrial production of polysulfone resins, with the market size increasing from 500 million yuan to 900 million yuan, with a compound annual growth rate of 16.96%.

With the improvement of the high-performance resin polyether ether ketone (PEEK) industry chain, its production costs have gradually decreased, which has brought certain limitations to polysulfone resins in high-end applications. The global market size for polysulfone resins will increase to 6.1 billion yuan by 2027, with an annual compound growth rate of 1.35%. As the product performance, quality stability, and brand awareness of Chinese polysulfone resins further narrow the gap with overseas leading companies such as Solvay and BASF, relatively low prices give Chinese polysulfone resins a certain competitive advantage in the global market. The market size for Chinese polysulfone resins will increase to 1.5 billion yuan by 2027, with an annual compound growth rate of 9.24%.

Source: Expert interviews, Frost & Sullivan research

Special engineering plastics are used in smaller quantities but are expensive. In China, special engineering plastics account for only about 0.1% of the total plastic consumption, while their share in the Chinese plastics market is around 2%. Among these, high-performance polyamides,Polyphenylene sulfideSulfoxide polymers and liquid crystal polymers are widely used in the automotive and electronics markets, with the largest demand, accounting for more than 90% of the special engineering plastics market size.

These four types of special engineering plastics are mainly produced by large multinational chemical companies.

For example, Solvay of Belgium has the production capacity for high-performance polyamides, polyphenylene sulfide, sulfone polymers, liquid crystal polymers, polyetherimides, and polyaryletherketones, which means that Solvay can produce almost all types of special engineering plastics.

In addition to Solvay, BASF also has the capability to produce high-performance polyamides and sulfone polymers, while Mitsui Chemical can produce high-performance plastics such as polyamides, sulfone polymers, and polyetherimides.

There are also some companies that specialize in a particular type of special engineering plastic product. For example, UK-based WEGS has over forty years of experience in the PEEK market, dedicated to providing customers with high-performance polyether ether ketone solutions. Its production capacity accounts for about 55% of global polyether ether ketones. The company holds a higher market share in the high-end application polyether ether ketone materials such as medical implants and engine parts.

Source: China Chemical Information Weekly, Expert Interviews, Frost & Sullivan Research

PEEK (polyether ether ketone), as a special engineering plastic, has highly guarded production and processing technologies, resulting in relatively few enterprises possessing large-scale production capabilities. The monopolistic situation in this market was established as early as the 1980s byImperial Chemical IndustriesThe discoveries and research by Dr. Daniel Fox, a physicist at ICI, began to take shape. Subsequently, ICI further researched and developed PEEK and commercialized it, pioneering the commercialization of PEEK materials. Currently, the global PEEK market is dominated by a few companies such as Victrex, which holds about 55% of the market share as the inventor of PEEK and has become a leader in the global high-performance polymer market. Other companies such as Solvay of Belgium and Evonik of Germany also possess PEEK production capabilities but have relatively smaller market shares.

In China, Chinese enterprises such as Zhejiang Pengfu Long Technology Co., Ltd. and Jilin Zhongyan Polymer Materials Co., Ltd. possess extensive PEEK product licenses and have widely applied it in fields such as automotive, electronic information, industry, and energy. Their industrial PEEK technology level has reached international advanced standards. In addition, Chinese enterprises such as Jida Special Plastics and Haoran Special Plastics also have commercial production capabilities for PEEK. It is expected that in the future, Chinese PEEK manufacturers will further increase their market share and contribute to the development of the special engineering plastics field.

Note: The competitive landscape represents the estimated market share of global PEEK manufacturers for 2022.

Note: The competitive landscape is based on PEEK production capacity statistics.

Source: Corporate annual reports, expert interviews, Frost & Sullivan research

Source: PLASTICS INDUSTRY ASSOCIATION, Frost & Sullivan research

Source: China Chemical Industry Information Center, Frost & Sullivan research

Special engineering plastic manufacturers typically operate their businesses using three main models: procurement model, sales model, and revenue-cost analysis.

(1) Procurement model: In the production of special engineering plastics, a raw material procurement model based on demand is adopted.This means that they negotiate with suppliers based on raw material market prices to determine supply prices and establish long-term cooperative relationships with core suppliers. The supplier management system includes regulations on supplier rating selection, product verification, and settlement methods. Rating selection takes into account multiple factors such as product quality, supply timeliness, price, and service. New suppliers must undergo strict verification and validation before being added to the supplier list. The settlement method is determined according to the cooperative relationship and the supplier's credit policy.

(2) Sales Model: Special engineering plastic manufacturers typically sell standard or customized special engineering plastic products directly to domestic or overseas customers.This model can reduce overall costs, improve capital turnover efficiency, and has an efficient sales process and flexible pricing mechanism. A small number of products may be sold through distributors or traders, but the direct sales model has significant advantages in cost control and profit maximization.

(3) Revenue-Cost Analysis: The revenue of special engineering plastic manufacturers mainly comes from the sale of special engineering plastic products.Costs mainly include direct material costs, manufacturing overheads, sales and marketing expenses, management and administrative expenses, etc. Direct material costs account for a significant proportion of the total cost, including chemical raw materials, chemical preparations, and modified additives. Manufacturing overheads cover energy consumption and depreciation of manufacturing equipment. Through income-cost analysis, special engineering plastic manufacturers can evaluate and manage their profitability and formulate strategies to improve business efficiency and profit margins.

Source: Expert interviews, Frost & Sullivan research

Source: Public information compilation, Frost & Sullivan research

National policy support is mainly reflected in two aspects. On one hand, it directly supports the special engineering plastics industry, and on the other hand, it supports the downstream high-end manufacturing sector. Policies such as the '14th Five-Year Plan' have made corresponding development plans for the development of the chemical new materials industry. The release of policies such as the 'New Materials Industry Development Guide' and the 'Classification of Strategic Emerging Industries' will determine the key development status of special engineering plastics.

Special engineering plastics play a key role in high-end manufacturing. According to the 'Statistical Communique on National Economic and Social Development in 2021' released by the National Bureau of Statistics, the downstream market for special engineering plastics has seen a relatively rapid growth rate: the general equipment manufacturing industry increased by 12.4%, covering fields such as machinery and equipment, tools, and instruments. The application potential of special engineering plastics to replace metal parts in this field is enormous. At the same time, the specialized equipment manufacturing industry grew by 12.6%, including specialized equipment for specific fields such as medical devices, aerospace equipment, and optical instruments. The application scenarios of special engineering plastics in these fields are difficult to replace, offering broad market prospects. Additionally, the automotive manufacturing industry increased by 5.5%. Special engineering plastics are used in the automotive industry for engines, intake systems, cooling systems, and fuel systems, providing important support for vehicle lightweighting and cost savings. The computer, communication, and other electronic equipment manufacturing industry grew by 15.7%, with demand for special engineering plastics also increasing continuously. They are used in fields such as connectors, printed circuit boards, high-temperature inserts, and insulating materials to meet the requirements of high performance and reliability. Finally, the power, thermal production, and supply industry grew by 10.9%. Special engineering plastics play a crucial role in the field of power transmission and supply, ensuring the stable operation of the power system.

The process of domestic substitution for special engineering plastics is accelerating. According to the '14th Five-Year Plan' development guidelines for the petroleum and chemical industry released by the China Petroleum and Chemical Industry Federation, among the new chemical materials that China focuses on developing and enhancing, engineering plastics and special engineering plastics aim to increase self-sufficiency rates to 85% by 2025, striving for the high-end development and differentiation of the entire industry.

Source: Company website, Frost & Sullivan research

Source: Company website, Frost & Sullivan research

Source: Company website, Frost & Sullivan research

Source: Company website, Frost & Sullivan research

Source: Company website, Frost & Sullivan research