Featuring 77 tables and 67 figures – now available in Excel and Powerpoint! Learn More
Global demand for hot melt adhesives and sealants is forecast to grow 4.0% per year to 4.2 million metric tons valued at $12.3 billion in 2025. Gains will be supported by:
- the higher performance of hot melts compared to natural and solvent-based formulations
- increased manufacturing activity, particularly of transportation equipment globally and of consumer goods – most notably nonwovens – in Southeast Asia, markets where hot melts have become increasingly popular
- a global increase in construction activity, including new governmental investment in infrastructure in the US
However, the development of improved adhesive technologies that allow for smaller volumes of adhesives will limit gains to some degree.
Textiles & Transportation Markets to See the Fastest Gains
Demand for hot melt adhesives and sealants in textiles experienced healthy growth in 2020 and 2021 due to a spike in the use of nonwoven wipes, masks, and other cleaning and PPE during the COVID-19 pandemic. Although the market will not continue to experience such strong gains, demand will remain at an above average level even as the pandemic wanes. In addition, the market for personal hygiene products is expanding in both developed and developing countries, boosted by aging populations and growth in personal incomes, respectively.
The transportation industry experienced sharp declines in 2020, with motor vehicle production levels falling at a double-digit rate in a single year. Though demand for hot melt adhesives and sealants in transportation equipment began to rebound in 2021, supply chain issues in 2021 limited recovery. The market has substantial room to expand through 2025 as supply chain issues resolve and pent-up consumer demand for motor vehicles is released.
Strong Gains in E-Commerce Activity Will Support Hot Melt Demand
As e-commerce continues to expand at a double-digit pace, more packages and more types of packages are being shipped. While water-activated tape is widely used in e-commerce applications due to its high strength and tamper-evident properties, strong growth in the number and variety of packaged shipped benefits the use of all types of adhesives and sealants, including hot melts. The strength of hot melt adhesives means they are more likely to be use with larger, heavier packages, which are accounting for an increasing share of e-commerce shipments as consumers become more comfortable purchasing all types of products via the internet.
Impact of COVID-19 Pandemic
The COVID-19 pandemic had a mixed impact on the global hot melt adhesives and sealants industry. Overall, the market saw moderate gains of 3.9% at the global level, but there were wide variations in performance between different markets. On the one hand, the essential nature of many of the products in which hot melt adhesives and sealants are used – from personal hygiene items to packaging for food and beverage products – insulates the market from severe shifts in demand. In other markets, certain applications (such as consumer goods and textiles) saw jumps in demand, while others (particularly transportation equipment) declined significantly.
Applications in which hot melt adhesives and sealants saw the most growth were those that were necessary to facilitate transitions to stay-at-home orders and lockdowns, as well as those that could help prevent viral spread:
- Work-from-home orders and remote learning due to school closures supported growth in demand for hot melts used in the manufacturing of tablets, laptop computers, and smartphones.
- Disposable masks and wipes were adopted early on in the pandemic to prevent the spread of COVID-19, which drove growth in demand for hot melt adhesives used with nonwoven textiles.
- Demand for “nonessential” consumer goods was boosted among consumers who were able to shift disposable income from travel and entertainment to durable goods spending, or who otherwise had increased purchasing power. For example, in the US several rounds of government stimulus payments contributed to increased disposable income for many households.
The construction market decreased 3.8% in 2020. Building construction was limited in major markets such as China, where shutdowns and strict stay-at-home orders delayed construction. However, a handful of countries – most notably the US – had surges in residential construction as homeowners increasingly invested in their properties, prompted by the more significant amounts of time they were spending at home. This, in turn, prevented further losses in demand for hot melt adhesives and sealants.
The pandemic-induced temporary closures of many production facilities in 2020 negatively impacted adhesives and sealants demand in a variety of manufacturing industries, particularly transportation equipment. Demand for adhesives and sealants in the transportation market fell 9.5% in 2020, as global motor vehicle manufacturing dropped 16% – first because of decreased demand, and later because of supply shortages.
Demand for hot melt adhesives and sealants in packaging applications and tapes and labels remained flat in 2020. Despite ongoing support from such “essential” products as food, beverages, personal care products, and household cleaners, the temporary shutdowns of some manufacturing facilities limited demand generated by packaging applications, including the use of tapes and labels. Further losses were prevented by an increase in e-commerce in 2020, but the relatively small share of e-commerce sales relative to overall retail sales limited the positive impact of increased e-commerce activity.
Demand for adhesives and sealants will accelerate in 2021 and 2022 as manufacturing and building construction activity continue to recover from 2020 declines:
- Gains in transportation equipment and electronic products will be boosted by further resolution of supply chain issues, as chip manufacturers boost production to meet the backlog of demand generated by motor vehicle producers, which restrained even faster growth in this market in 2021.
- Textiles will continue to grow at an above average pace, as the ongoing threat of COVID-19 variants spurs sales of masks. Demand for wipes will also remain steady as they continue to be used to disinfect surfaces in homes and businesses.