The rapid growth in the packaging industry and increasing consumer spending are the key factors creating a huge scope for the adoption of hot melt adhesives across the world. Hot melt adhesives are extensively used in several industries, including construction, automotive, packaging, and electronics, due to their volatile organic compound-free nature, ease of application, and fast setting time.
Furthermore, the rise in disposable income is resulting in more spending power among consumers, as a result of which the demand for these adhesives is increasing. Owing to such factors, the hot melt adhesives market is projected to demonstrate a CAGR of 6.1% during the forecast period (2020–2030) and reach $12,761.3 million by 2030.
However, the industry is currently witnessing a dual crisis on account of the COVID-19 pandemic and collapse in crude oil prices. The hot melt adhesives industry is strongly backward integrated with the chemical industry, which is dependent on crude oil feedstock, and forward integrated with the automotive, construction, packaging, and electronics industries. Since operations of all these industries have been affected due to the lockdown imposed in order to curtail the spread of the disease, the demand for these adhesives has declined in the past few months.
The hot melt adhesives market, on the basis of resin type, has been categorized into EVA, styrenic block copolymer (SBC), polyurethane (PU), polyamide (PA), amorphous polyalphaolefin (APAO), metallocene polyolefin (MPO), and others. Of these, EVA hot melt adhesives held the largest market share in 2019. This can be majorly attributed to their several advantages such as quicker setting time, longer shelf life, and suitability for wide-temperature-range applications.
The hot melt adhesives market has been classified into packaging, diaper, furniture, footwear, textile, automotive, electronics, bookbinding, and others, on the basis of application. During the forecast period, the revenue generation from hot melt adhesives is expected to witness the fastest growth in the furniture category, owing to the growing adoption of these adhesives in furniture production. Furniture manufacturing is witnessing a rise globally, especially in countries such as China, India, and Germany, to meet the growing demand on account of the surge in population.
Regionally, APAC accounted for the largest share in the hot melt adhesives market and the trend is likely to continue in the coming years. The large manufacturing base and vast population, along with rising disposable income, are resulting in a high demand for automobiles, packaged food products, and electronics in the region. Thus, to meet the growing demand for these products, companies in the market are increasingly adopting hot melt adhesives, as these adhesives have a quick setting time, which further helps in production efficiency. Owing to such factors, the demand for hot melt adhesives is expected to increase in the region in the near future.
Key players operating in the hot melt adhesives market are focusing on the strategy of mergers and acquisitions in order to enhance their product portfolio and increase their market share. For instance, in July 2020, Arkema Group proposed the acquisition of Fixatti NV, a manufacturer of high-performance thermobonding adhesive powder. The acquisition would help strengthen the position of Arkema Group in the global market for hot melt adhesive products, which are widely used in the construction, automotive, and textile printing industries.
In addition, in January 2020, Follmann GmbH & Co. KG acquired Moscow-based company Chemical Alliance LLC. Follmann GmbH & Co. KG expanded its market of PU hot melt adhesives in Russia with this acquisition, which resulted in increased sales activities globally in market segments, such as textile lamination, panel production, and filter production.
Some of the key players operating in the hot melt adhesives market are Henkel AG & Co. KGaA, Sika AG, 3M Company, H.B. Fuller Company, The Dow Chemical Company, Ashland Global Holdings Inc., DuPont de Nemours Inc., Huntsman Corporation, Evonik Industries AG, Avery Dennison Corporation, Arkema Group, Westlake Chemical Corporation, Jowat SE, and Beardow & Adams (Adhesives) Limited.