While the impact of the Covid-19 pandemic was evident in many replies to the ERJ Compounding Survey 2020, there was little evidence of panic over the crisis within the sector.
Respondents to this year's survey, carried out during March and April, posted significant declines in average ratings for the elastomer compounds markets when analysed by materials-type and end-use sector.
Asked to rate growth in their main end-use markets - between 5 (high growth) and 1 (decline) –respondents returned an average rating of 2.63. This compared to equivalent ratings of 3.03 and 3.26 in the survey last year and in 2018 respectively.
For the automotive market, the average fell for the second year in a row, reflecting continued contraction in this normally powerhouse sector. There was, however, some encouragement in that the rate of decline was much lower than that recorded a year ago, particularly in Europe.
There was a marked drop in business confidence among suppliers to the sealing products sector, which overlaps many end-use markets. Sentiment around the food/pharma, mining/materials-handling and oil & gas sectors also headed south, leaving construction and recycling as the sole bright beacons.
Conversely, the overall average rating for growth in our analysis by country/region edged upwards, on positive sentiment around prospects in several countries, not least Germany – encouragingly recovering from a prior-year dip.
The upbeat regional rating was also accounted for by increased levels of confidence around markets in Benelux, Poland, Turkey and – maybe as a lag effect from Brexit-related stock-building – the UK.
This overall positive trend was registered despite major declines in Italy and Spain – most likely reflecting the particular severity of the Covid crisis within industrial regions in both EU member states.
Respondents were more gloomy than last year in their assessments of the market by materials-type, with the overall rating averaging just 2.43 – down from 2.73 last year. This negative was trend was weighted towards more speciality materials, including HNBR, fluoroelastomers and silicones.
However, it should be noted that several respondents added high market ratings – 3 and above – for some materials not listed on the survey, among them high-end ACM and AEM elastomers.
Of the high-volume materials, natural rubber, styrene butadiene rubber and EPDM all edged up slightly on solid market ratings recorded over the previous two years, by respondents to the annual ERJ Compounding Survey.
Comments in the poll, though, suggested continuing uncertainty about the direction-of-travel of the Covid crisis and the effectiveness of measures being taken to return society and industry to some degree of normality.
The indications were that it will be at least a year before the impact of the pandemic on the elastomer compounds industry and its markets can be fully and accurately assessed.
Read the full article in the May/June 2020 issue of European Rubber Journal magazine
