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March 16, 2016 02:00 AM

Expert: Rubber remains top consumer for zinc oxide

Bruce Meyer
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    Bruce Meyer
    Stefan Schlag, director of inorganic chemicals for IHS Chemicals, delivers a market focus presentation at the Zinc Oxide Conference.

    SCOTTSDALE, Ariz.—Rubber and tire manufacturing continues to be by far the largest consumer of zinc oxide globally, according to a director at IHS Chemicals.

    For 2015, global demand for zinc oxide was estimated at 1.5 million metric tons, with consumption of the additive in the rubber industry at 830,000 tons, or 55 percent of the output, said Stefan Schlag, director of inorganic chemicals at IHS.

    The next largest market is ceramic and glass, at 20 percent, followed by chemicals at 8 percent, agriculture at 7 percent, and paint and coatings at 3 percent. Schlag presented his report at the recent Zinc Oxide Conference in Scottsdale, Ariz.

    “Over half of all zinc oxide is consumed as an additive in rubber vulcanization,” he said. “And within this segment it is obviously the tire production which account for about two-thirds of all zinc oxide consumption” in rubber.

    The biggest region for zinc oxide usage in rubber and tires is Northeast Asia, which includes China, with 41 percent of the total used in the sector. That is followed by Europe and Southeast Asia, both at 17 percent, North America at 12 percent, and Central and South America at 7 percent.

    “The relatively large consumption in Southeast Asia is obviously due to its strong position in the rubber market as a major consuming area for zinc oxide,” he said.

    Schlag noted that the growth of natural rubber usage in tires, which is expected to continue climbing through 2020, bodes well for zinc oxide volume to keep rising in the rubber sector.

    While he had rubber and tires accounting for 55 percent globally, several zinc oxide producers at the meeting put the percentage for the sector in North America closer to 40 percent.

    Tire production in the U.S. during the last several years didn't follow the growth in the automotive industry, Schlag said, because the vast majority of the tire market goes into replacement shipments. As “miles driven” began to rise in 2014 and through last year because of falling gasoline prices, there should be some delayed benefit to the tire aftermarket.

    The sharp increase of imports from 2011-14 also cut into North American tire production, according to Schlag. With the tariffs and duties on Chinese imports again increased last year in the U.S., that also should lead to increased production, as will the new tire factories coming online in North America.

    For non-tire rubber goods, Northeast and Southeast Asia again have provided the most growth in recent years, a trend he foresees continuing in the near future.

    “The automotive sector is expected to show moderate growth, though growth expectations have dampened recently with the slower growth of the Chinese economy,” he said.

    Northeast Asia also was the dominant region for total zinc oxide usage, accounting for 40 percent of the 1.5 million tons consumed last year. Europe followed at 19 percent, North America and Southeast Asia were both at 14 percent, South and Central America at 8 percent, and Africa/Middle East at 5 percent.

    Schlag said supply and demand for zinc oxide were way out of proportion in 2015, with capacity utilization at a little more than 60 percent.

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