Automotive, Soft-touch Markets Promise Strong Year

The global thermoplastic elastomer market will grow 6 to 7% this year, forecasts Chris Landis, TPE general manager for PolyOne, Cleveland, OH. North American demand will rise roughly 6%, and European closer to 7%, he predicts. “This will primarily be driven by increased penetration of the automotive and construction sectors by TPV (thermoplastic vulcanizate) and TPO (thermoplastic olefin) technologies, largely at the expense of thermoset rubber and traditional vinyl products.”

Landis also foresees significant growth for styrenics in the consumer goods sector, especially in soft-touch applications. TPE consumption in China will spurt 10 to 11%, thanks largely to exports of consumer goods, he believes.

Volume in 2002 was up 4.5%, Landis says. Sales of TPEs, both resins and compounds, totaled about 1.134 million tonnes (2.5 billion lb), worth $4.5 billion last year, he estimates, with North America accounting for 41% of the demand, Europe 37%, and Asia-Pacific 18%.

Worldwide consumption of TPEs will reach nearly 2.2 million tonnes, valued at more than $10 billion, in 2006, predicts The Freedonia Group, in Cleveland. This represents an average annual growth rate of 6.4% from 2001 to 2006. North America will show stronger gains than Europe over that period, at 5.7%/yr versus 4.4%/yr, according to Freedonia’s “World Thermoplastic Elastomers” report, while consumption in Latin America will rise at a double-digit rate, and in Asia-Pacific at over 8%/yr.

Styrenic block copolymers (SBC) will remain the largest-volume TPE, with global consumption reaching 970,000 tonnes in 2006, says the study. By then, consumption of TPOs will amount to 470,000 tonnes, thermoplastic urethanes (TPU) 260,000 tonnes, TPVs 160,000 tonnes, and copolyester (COPE) elastomers 140,000 tonnes.

Market drivers and material trends

Automotive applications will continue to provide the largest market, accounting for 600,000 tonnes of demand in 2006, says Freedonia.

In consumer markets, soft touch is the overwhelming driver, notes Walt Ripple, director of marketing at GLS, McHenry, IL. “Soft touch is strong and getting stronger,” he exclaims. Many applications have yet to add soft touch, he says, and established uses will evolve such as by adding color, changing the feel, or bonding to a different substrate. “Softer soft touch is a trend, Ripple adds.”

Landis foresees strong growth in “sensory”-type polymers. He points to materials that change color with temperature or in the presence of an electrical current, as well as ones that provide unique tactile characteristics. “These materials will offer product designers a whole new palette of options when developing applications ranging from consumer goods to automotive interior assemblies.”

Processors will have more choices, too, because suppliers increasingly are forging alliances to broaden their range or reach. For instance, PolyOne and DuPont Dow Elastomers (DDE), Wilmington, DE, are jointly developing materials based upon DDE’s metallocene olefin polymers. Zeon Chemical, Louisville, KY, is combining its technology with that of Advanced Elastomer Systems (AES), Akron, OH, for higher-temperature TPVs. Solvay Engineered Polymers, Auburn Hills, MI, has an alliance with Thermoplastic Rubber Systems, Shirley, MA, to offer TPVs to the automotive market. GLS is teaming with BASF Corp., Mt. Olive, NJ, for TPUs, and with GE Plastics, Pittsfield, MA, to develop tailored pairs of rigid substrates and elastomers for soft-touch applications. “Alliances are an accelerating trend,” says Landis. Margaret Mattix, global marketing manager for AES, speaks for many in seconding that view. Suppliers facing today’s tight margins must continually look for partnerships, explains Bob Gerlach, sales and marketing vp. for Solvay.

How growth prospects stack up by TPE type

Styrenics. The global market for hydrogenated SBCs exceeded 80,000 tonnes in 2002, says Garret Davies, vp. for the Americas and global director for Kraton G at Kraton, Houston, TX. Soft touch remains a big driver, he adds, and demand for compounded materials will show good gains, thanks to many new applications, particularly in automotive. Growth in demand for processing-related applications (that is, excluding uses such as in adhesives and asphalt modification) was 6 to 7% in 2002, and should rise to 7 to 9% this year, he believes. New producers and capacity (Sep 02 MP, 60; MPI, 57) have made pricing more competitive, he admits.

In China and elsewhere in the Pacific Rim, footwear is the leading consumer of SBC, says Freedonia, but the smaller-volume markets for consumer and sporting goods will post the strongest percentage gains.

Thermoplastic olefins. Overall demand will rise 3 to 4% this year, predicts Gerlach. Use of TPOs in auto applications has been increasing by 10%/yr, says Ron Price, director of automotive business for Huntsman, Auburn Hills, MI. New exterior and interior applications promise continuing growth. (See Price’s overview on p. 37.) TPO consumption for interior applications should grow by double-digits annually for the next five years, forecasts Randy Stone, marketing manager for the Americas for DDE. While both interior and exterior applications will post volume gains, interior uses will account for 15% of global automotive TPO consumption in 2005, up from 7% in 2001, says Gerlach. Both compounded TPOs (CTPO) and reactor-grade materials (RTPO), are sharing that growth, says Freedonia, with RTPOs gaining market share.

Thermoplastic urethanes. World demand for TPUs should rise 6.3%/yr, thanks primarily to consumption by the automotive market, predicts Freedonia. However, it forecasts the greatest percentage gains in consumer and sporting goods.

Asia will post 8% growth this year, says Jean-Marc Galvez, global business manager for elastomers for Merquinsa, Barcelona, Spain, while consumption in the U.S and Europe will increase by 3 to 4.5%. PVC- and rubber replacement and soft-touch overmolding are key drivers, he adds. Gerry DiBattista, market development specialist at Bayer, Pittsburgh, PA, expects a 3 to 4% increase in TPU volume in Nafta this year, with demand from multicomponent applications growing over 5%/yr. He’s also seeing more interest in blow molding; Bayer may launch in Nafta this year, grades specifically designed for blow molding.

Thermoplastic vulcanizates. TPVs will enjoy the fastest overall growth, says Maack Business Services, Au, Switzerland, at 7.5%/yr in Europe and nearly 15%/yr in automotive — figures that Mattix of AES terms reasonable. TPVs will post above-average growth, agrees Landis. Not surprisingly, the number of suppliers is growing, especially since AES’ patents have expired (Sep 02 MP, 58; MPI, 53).

“The TPV sector in particular has the potential for tremendous growth in weatherseal applications as new product and process technologies solve past issues with compression set and creep resistance,” notes Landis. “Recyclability, weight reduction, design flexibility, and overall systems cost-savings are all drivers being highlighted by major automotive OEMs.” TPVs are now getting the nod mainly because of performance, not recyclability, says Arnold Brief, vp. of Skeist, Whippany, NJ.

Weatherseal use will grow over 10%/yr, at the expense of EPDM rubber, reckons Jim Haseley, TPE market development manager at Solvay. TPVs accounted for less than 5% of the automotive weatherseal market in North America in 2002, but should exceed 40% by 2010, he believes. “It’s only the tip of the iceberg now,” agrees Mattix.

TPV prospects under the hood are being enhanced with the launch of materials that can handle higher temperatures. Last September, Multibase, St. Laurent Du Pont, France, introduced what it calls the first family of TPVs that incorporate silicone. These so-called TPSIVS provide a continuous-use temperature of up to 150°C and are less tacky and noisy than other materials, says Lucrèce De Ridder, new business development manager. This month, Zeon is commercializing a family of TPVs that are said to withstand temperatures of up to 150°C, while also resisting synthetic oils and lubricating fluids.

Copolyester elastomers. Worldwide demand for cope will increase 7.8%/yr through 2006, forecasts Freedonia, thanks particularly to product developments for new film and sheet applications.