Leatherhead, UK – Worldwide demand for thermoplastic elastomers (TPEs) was affected severely by the Covid-19 pandemic, as consumption fell 31.4% year-on-year to 3.23 million tonnes in 2020, exclusive new data from Smithers show.
Despite a projected rebound to 3.84 million tonnes in 2021, demand is not expected to return to pre-pandemic levels before 2024, said Smither’s latest study “The Future of Thermoplastic Elastomers To 2026”, published 10 March.
According to the report, TPE consumption is set for a compound annual growth rate (CAGR) of 9.5% during the 2020-2026 period, representing both a recovery in core end-use industries – such as automotive manufacturing – and the emergence of new market opportunities for high-performance materials.
The report noted that lockdown regulations and the resultant loss of orders disproportionately affected smaller compounders; with only those supplying directly into medical applications – masks, syringes, and vials – seeing increased sales in 2020.
Larger TPE producers, it went on to say, have rationalised operations in the short-term, but may find new opportunities in specialised applications as they emerge from the pandemic.
Despite being severely hit by Covid-19, the automotive industry remains the dominant consumer, accounting 43.9% demand for all TPEs in 2020.
According to Smithers, demand by the electronic vehicles (EVs) segment was “less depressed”, particularly due to China’s economic recovery in the second half of 2020.
The segment represents new challenges and opportunities to suppliers, as demand continues to fall for ‘under-the-bonnet’ components and rises for new materials for on-board battery systems.
“To gain a competitive advantage there is an onus to lower the prices of TPE engineered for use in EVs, which are currently higher than those for conventional vehicles,” the report suggested.
In addition, tight regulations on petrol-powered vehicles, will mean that manufactures will favour TPEs as lighter weight, high-performance alternatives to conventional engine and chassis components.
Another key area for TPE manufacturers will be the ‘full recyclability’ and absence of harmful substances, which according to Smithers will be become standard requirement for many grades.
Comparing the various grades, the report said that pre-pandemic TPS had begun to lose market share to the EPDM-based TPEs; thermoplastic polyolefin elastomers (TPO) and thermoplastic vulcanisates (TPV).
However, with the outbreak of Covid, the materials have started to regain market share, with TPS again favoured as a replacement for plasticised-PVC in medical device and EV sectors.
“In the immediate term there is a need for additional styrene-butadiene-styrene (SBS) hydrogenation capacity, and developments to improve solvent adhesion,” the report added.