2023 Market Insights: 3D Printing, Color & Compounding and Rotational Molding

Every year, M. Holland’s market managers take time to reflect on the major trends of the past 12 months and share predictions and advice for the coming year. In the first installment of our 2023 Market Insights series, we spoke with Carlos Aponte, Scott Arnold and Bill Christian — M. Holland’s market managers for the 3D Printing, Color & Compounding and Rotational Molding markets, respectively — about their expectations for the industry in 2023.

Though all three markets weathered recent supply chain disruptions, inventories are finding balance as we enter 2023. Now, 3D printers, compounders and molders are focusing on expansion.

The Color & Compounding market has dealt with supply shortages for months, but that has not deterred private equity interest in the space. When consolidation takes place, the surviving entities are often cutting back on sales and support functions to reduce cost and reduce redundancy. And according to Scott Arnold, M. Holland’s Color & Compounding Market Manager, many compounders are prioritizing higher valued customers.

“Low-margin molders are struggling to find new compounding sources as compounders make a long-term play for bigger business opportunities,” Scott explained. “While it’s great that private equity sees value in the color and compounding space, the consolidation is making sourcing difficult for smaller converters.”

Sourcing had already been a persistent problem for many as resin, additive and pigment shortages frustrated compounders through the COVID-19 pandemic. Demand continued to outpace supply for much of 2022 as geopolitical tension in Europe and Asia disrupted already fractured supply chains. Fears of a looming recession and rising interest rates are beginning to slow demand. Scott predicts recessionary planning will limit longer-term orders for resin and help to balance the market in 2023.

In the rotational molding space, increased labor costs and supply chain issues stressed molder margins in 2022. Economic conditions have caused rotational molders to eliminate lower-margin product lines, reevaluate short run rates and decrease the production of complex parts. This effect has led impacted OEMs to open new manufacturing facilities, which has caused increased pressure on machine and equipment suppliers.

Bill Christian, M. Holland’s Product Manager for Rotational Molding, predicts that worker scarcity will significantly impact business. “Due to labor shortages, processors are beginning to embrace automation with primary machinery and secondary operational equipment to fill the gaps,” Bill said. “Automation efforts will likely grow in 2023 as new molders develop manufacturing processes without access to the volume of labor that supports more traditional methods.”