Notch tips rubber silicas market to cool

By Patrick Raleigh ERJ On-line news editor

Amherst, Massachusetts-Growth in rubber industry demand for precipitated silica fillers is slowing down, particularly in Europe, according to a new report from Notch Consulting Group.

Nevertheless, the firm believes the market is still set to increase by about a third to over 800 kilotonnes per annum between 2003-10. The progress, it said, is closely linked to the rate of penetration of green tyres in the various world markets.

Silica demand will also benefit from a further expansion of the strong position of 'green' tyres in the European Union, where they are now standard for OE passenger tyres, the US group noted.

Precipitated silica competes primarily with carbon black as a reinforcement agent in tyres. Silica is also widely used in rubber products such as conveyor belts, belting, hoses, rollers, silicone parts and footwear, though these are mainly mature markets with annual growth of just 3-4 percent.

European demand for green tyres has slowed significantly in recent years as the OE passenger tyre market reached saturation levels, said the Notch report called World Markets for Precipitated Silica.

This deceleration is unlikely to be offset by new growth in the replacement tyre market, continued Notch. This sector, it said, “remains small due to a lack of consumer awareness or interest in green tyres, as well as their higher cost and potentially shorter service lives.”

Against this, silica is also finding greater use in the tread compounds of winter tyres and high performance tyres, the report continued.

Overall, however, Notch said the growth in the silica market would largely depend on an increase in the penetration of green tyres in North American and Asian tyre markets. Its report presents a mixed outlook for prospects in these regions, particularly given the significant cost disadvantage of silica compared to carbon black.

“While penetration in the US market OE passenger tyre market has risen to about 20 percent, it is unlikely to rise to European levels without tighter fuel economy standards,” said Notch

Silica has also achieved little penetration in the truck tyres market, and now faces competition from products such as Goodyear's BioTred tyre, which uses a cornstarch filler, added Notch.

In Asia, Notch cites Japan as potentially significant market for precipitated silica, in the longer term. Japanese demand for 'green tyres' is set to grow given the country's “high fuel costs, well developed highway infrastructure and high levels of car ownership.”