Underwater Pelletizing Market Size, By Type, By Production Capacity, By Level of Automation, By Material Type, By Application, By End Use Industry, By Distribution Channel Analysis, Share, Growth Forecast, 2025 - 2034

Underwater Pelletizing Market Size

The global underwater pelletizing market was estimated at USD 659.7 million in 2024 and is expected to grow at a CAGR of 3.8% from 2025 to 2034, driven by rising demand for high-quality plastic pellets across industries such as automotive, packaging, medical, and electronics. This growth is further catalyzed by innovation and progress in polymer production as many manufacturers focus on enhancement of efficiency and accuracy of pelletizing systems. In context, notable companies such as Coperion and Maag have developed new, more energy-efficient underwater pelletizing systems which allow the processing of new materials from commodity plastics to high-performance polymers.
 

Moreover, the push towards sustainability has also motivated the increase of bioplastics as well as the technologies which aid in waste reduction and improvement of plastic pelletizing efficiency. Automation and digitalization remain to be critical issues for these companies so that better throughput and quality control can be achieved. As per Statista, Germany, France, the U.S., Japan, and Mainland China, major manufacturing countries, have started government-supported plans to digitize production in different industries.
 

All the advances in technology are now shifting the focus of the industry towards sustainability as well as profitability. This is proven with the invention of systems that improve material yield, reduce energy consumption as well as lower water usage. Additionally, the use of underwater pelletizing is aiding the plastic recycling industry as it increases the efficiency of handling recycled materials while maintaining consistent pellet quality and reducing the environmental impact and that of the 50 million tons of plastic waste produced each year, is being cut down.
 

There is great potential growth in the future of the industry due to the increasing demand for advanced solutions in both virgin and recycled plastic production pellets. Pellets and even equipment that aid the manufacturing of pellets such as extruders, dryers and cutter aids the industry melting pallets. This integration will allow for less operational costs and make the production process smoother. Market demand is pulling towards systems capable of superior performance without obstruction to the recycled materials.
 

Underwater Pelletizing Market Trends

• Recent improvements in underwater pelletizing technology show a move toward sustainability and efficiency. The U.S. Department of Energy reports that businesses are focusing on energy-efficient manufacturing. They found that better water flow and cooling processes in underwater pelletizing systems have cut energy use during production. These changes are important as governments worldwide require stricter energy and environmental rules.
   
• Similarly, the European Commission’s Circular Economy Action Plan encourages using recycled materials in production, including pelletizing. Companies are now using more sustainable materials like biobased and biodegradable polymers in their processes. New technologies, including better filters and precision cutting tools, help to create high-quality pellets from recycled materials.
   
• Moreover, IoT technologies monitor and control water temperature and pressure, significantly improve the efficiency and helps to reduce waste. Nevertheless, these notable advancements in technology and regulations point to a future where underwater pelletizing uses less energy, has a smaller environmental impact, and supports global environmental goals.
   

Underwater Pelletizing Market Analysis

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Based on product type, the strand pelletizer segment accounted for revenue of around USD 373.9 million in 2024 and is estimated to grow at a CAGR of 4.1% from 2025 to 2034.
 

• Strand pelletizers are primarily employed for producing large volumes of pellets from materials that are relatively less viscous. During this process, molten polymer is extruded into continuous strands that are then cooled in water and then cut into pellets. Such systems are very common in industries like automobiles, packaging, and consumer goods. For instance, companies such as Coperion and Buss have strand pelletizing systems that are famous for high throughput and effective cooling. Such a system is very ideal for thermoplastics and engineering plastics.
   
• Underwater Pelletizers have the molten polymer cut directly into pellets in a bath of water. This is somewhat better at giving control over size and shape in pellets, mainly for materials more viscous in nature or processes that are held at higher temperatures. Underwater pelletizers have gained popularity because of their versatility in engineering plastics, specialty compounds, and in recycled materials.
   
• Maag and Nordson companies have the uppermost underwater pelletizing systems that maintain precise control over palletization, along with superior surface quality. Such products are in especially high demand because they can process challenging materials such as high-performance polymers and bio-based plastics much more effectively and with less degradation.
   

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Based on the distribution channel, the underwater pelletizing market is categorized into direct and indirect sales. The indirect segment held around 55.1% of the total market share in 2024 and is anticipated to grow at a CAGR of 4% from 2025 to 2034.
 

• The indirect distribution channel encompasses third-party distributors, resellers, or agents. In indirect channel wide geographical distribution & core market segments targeted where direct sales presence is inadequate. To put this into context, companies such as Nordson and Econ distribute their underwater pelletizing systems via a global network of distributors to reach a diverse customer base globally. The distributors can provide localized support with installation, maintenance, and training services on-site, reducing the time lag.
   
• Furthermore, the direct sales are selling the underwater pelletizing systems directly from the manufacturer to the end user, which has the advantages of proximity and leads to tailored solutions in many areas. This model provides closer relationships with clients, improved technical support and more direct feedback on how the system is performing.
   
• Direct sales are used by larger players such as Maag and Coperion for their relatively costly underwater pelletizing systems (which makes them able to better serve a wide segment of the market including automotive, pharmaceutical, and specialty plastics with tailored solutions and services). The approach of direct selling by these companies ensures that their ecosystem is precisely tailor-made to serve the requirements of the client and provides you with very hands-on experience with installation and maintenance.
   

Based on the level of automation, the underwater pelletizing market is categorized into manual, semi-automatic, fully automatic. The fully automatic segment held around 39.7% share of the market in 2024.
 

• High demands for productivity, consistency of the product, and low labor costs favor fully automatic systems. These systems perform well under conditions of high-throughput production where accuracy and efficiency are key.
   
• Both semi-automatic and manual systems may find continued application in smaller operations or specialized applications where flexibility and lower capital investment are a requirement.
   

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In terms of the country, the U.S. underwater pelletizing market was valued at USD 157.9 million in 2024 and is estimated to grow at a CAGR of 3.9% from 2025 to 2034, fueled by steadily increasing demand for quality pellets in various areas such as plastics, automotive, pharmaceuticals, and recycling. In past, the U.S. Department of Energy has been pushing hard towards reducing energy usage and emissions in manufacturing. This goes directly in line with the development of underwater pelletizing, which is energy-efficient compared to others while ensuring that the product meets high standards.
 

• In North America region, the U.S. dominates with an overall market share of around 87.3% in the North America underwater pelletizing market.  Government support has become one of the critical elements supporting this market. In the US, EPA Sustainable Materials Management Program has also fostered greater rates of recycling coupled with utilization of sustainable materials to boost advanced technologies in palletization that ensure efficiency in managing the recycled polymer to maintain their respective qualities. In Canada, the CPIA has played a significant role in developing sustainability and has been focusing on a more circular economy as material is recovered, reused, or recycled instead of being extracted from the natural world. These moves have seen light under various regulations issued by the government of Canada, particularly under the Zero Plastic Waste Initiative to minimize plastic wastes while ensuring reduced reuse, or most importantly, recyclability.
   
• Europe underwater pelletizing market in a market share about 22.04% in 2024 and projected to grow at a CAGR of 3.5% during 2025-2034. The political support for underwater pelletizing in Europe is extremely strong because it has been endorsed by a significant commitment to protecting the environment on the continent and being sustainable as well. Environmental regulations such as the European Green Deal and the Circular Economy Action Plan also promote the use of recycled and renewable materials in increased efficiency, reduced waste in resource usage, across Europe. The EU has also adopted the numbers of directives like the Waste Framework Directive and the Packaging and Packaging Waste Directive, which are further encouraging the adaptation of recycling technologies, such as underwater pelletizing. These regulations have generated a demand for processing systems of recycled materials in an efficient manner, and the superiority of quality control and energy efficiency have caused underwater pelletizers to increasingly be applied.
   
• The Asia Pacific underwater pelletizing market accounted for 34.6% market share in 2024 and is projected to grow with a CAGR of around 4.7% during 2025 to 2034. Drivers such as increasing industrial activity, rising demand for quality pellets, and initiatives toward sustainability are propelling the growth of underwater pelletizing systems market in the Asia Pacific region. As manufacturing is becoming the stronghold of the Asia Pacific region, countries such as China, Japan, South Korea, and India are witnessing growing demand for advanced pelletizing technologies to support the production of plastics, automotive components, and specialty chemicals. In Japan, the same commitment by the government to implement the Circular Economy and reduce plastic waste has inspired similar demand for advance pelletizing technology. Initiatives introduced by the Ministry of the Environment in the framework of waste management, recycling, and plastic reduction are creating friendly conditions for underwater pelletizing systems that can support recycling of plastic waste. The same is applicable in South Korea. South Korea passed the Act on the Promotion of Recycling of Electrical and Electronic Products and Automobiles to boost recycling, further promoting the increase of the requirement of efficient pelletizing solutions.
   

Underwater Pelletizing Market Share

 In 2024, key companies like Coperion, MAAG, Farrel Pomini, Nordson, USEON held a combined market share of around 15%-20%. These companies are actively engaging in mergers, acquisitions, facility expansions, and collaborations to enhance their product portfolios, reach more customers, and strengthen their market positions.
 

• Maag Group is working on technology innovation by continuously assuring the performance improvement of the underwater pelletizing systems. The company innovated premium features such as precise control of pellet size, more energy-efficient cooling systems as well as elite smart power systems incorporating IoT.
   
• Coperion has long been a significant player, and it has concentrated primarily on expanding its product portfolio and service offers. The company has been producing a variety of underwater pelletizing systems designed to respond to the shifting demand for recycled and bio-based plastics.
   

Underwater Pelletizing Market Companies

Major players operating in the underwater pelletizing industry are:

• CGC Technology
• Chuangbo Machine
• Coperion
• Cowell Extrusion 
• Cowin Extrusion
• Crown Machine
• ECON
• Farrel Pomini
• MAAG
• Neoplast
• Nordson
• Prime Margo Machines
• USEON
• Wuxi Huachen
• Xinda
   
• Companies like ips Intelligent Pelletizing Solutions and Baracco are improving efficiency by implementing automated start/stop systems, self-cleaning technologies and precision control.
   
• Models such as the ips-UWG 75 S & 120 S are ideal for a range of industries, featuring adjustable pellet sizes, rapid cooling, and elevated production capacities.
   
• According to a report from Process Industries and Equipment, companies such as Erema and Gala Industries are focusing on pelletizing recycled plastics as the core component of a circular economy.
   
• Manufacturers have developed pelletizing systems for bio-based materials such as PLA (Polylactic Acid) and PHA (Polyhydroxyalkanoates).
   
• Several companies have made efforts to enhance water filtration, reduce energy consumption and suppress noise in their systems to attract sustainability-centered buyers.
   
• Larger firms acquire smaller competitors to expand their technology portfolio and increase market share. For instance, Nordson Corporation acquired Xaloy Holdings to enhance its underwater pelletizing technology offerings.
   

Underwater Pelletizing Industry News

• In January 2025, Useon announced its private placement fund-raising plan after moving to the new factory. The company intends to issue 3.59 million shares at most to the Industrial Machine Tool Industry Investment Fund (Limited Partnership), for the amount not to exceed USD 9.71 million.
   
• In May 2024, Concord Compounding Limited (CCL), a leading PVC compounder based in Concord, Ontario, Canada, has announced a USD 4 million investment in its expansion with the purchase of two new CP2500 Farrel Continuous Mixers. These advanced systems will be installed at CCL’s Concord facility, significantly boosting the company’s manufacturing capabilities, improving process efficiencies, and elevating its quality standards.
   
• In December 2023, Intelligent Pelletizing Solutions GmbH & Co. KG unveiled a new model of its underwater pelletizing system (UWG) capable of processing up to 6,000 kg/h. The first of these large-scale systems has been successfully delivered to MOCOM, a global leader in thermoplastic polymer compounding.
   

This underwater pelletizing market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) & volume (Thousand Units) from 2021 to 2034, for the following segments:

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Market, By Type

• Strand pelletizer
• Underwater pelletizer

Market, By Production Capacity

• Up to 100 kg/hr         
• 100 kg/hr to 500 kg/hr          
• 500 kg/hr to 5000 kg/hr        
• More than 5000 kg/hr    

Market, By Level of Automation

• Manual
• Semi-automatic
• Fully automatic

Market, By Material Type

• Commodity plastics
• Plastics Engineering
• High-performance polymers
• Bioplastics
• Elastomers and thermoplastic elastomers (TPEs)
• Additive masterbatch and fillers

Market, By Application

• Plastics and polymers manufacturing
• Textile and fiber production
• Food packaging
• Recycling and waste management
• Compounding and masterbatch production
• Others  

Market, By End Use Industry

• Automotive
• Textile
• Pharmaceutical
• Construction
• Electronics
• Others

Market, By Distribution Channel

• Direct
• Indirect

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa