HOUSTON—Many times in life, perspectives can change greatly in a short period.
That's the way it was for Juan Ramon Salinas, managing director and CEO of the Houston-based International Institute of Synthetic Rubber Producers, during the early days of the novel coronavirus pandemic.
He traveled to Europe in February for IISRP meetings at a time when the COVID-19 crisis was starting to heat up in Italy, impacting the ability of some Italian members to travel to the session. But the outbreak still was seen largely as a problem confined to China, where the auto industry was shut down for January and February, along with many of the nation's synthetic rubber facilities.
"When we had the meetings in February and were reviewing the situation in the industry, we reviewed how big the impact would be on the industry in China," Salinas said in an interview with Rubber & Plastics News. "In a certain way, we saw the pandemic as very far away. But at the end of February, the situation was on the other side of the coin."
That is when the coronavirus started to spread to Europe and then North America. Social activities were canceled, and the industrial and commercial production supply chain became disrupted. Complete countries were shut down.
"We expected a certain effect in early February, thinking it was going to be little impact, but not as big as it became," he said. "When the pandemic was in Europe, the expectation changed because the situation was more global."
That was the point when the IISRP decided to postpone its Annual General Meeting scheduled for May in Bangkok, Thailand, until October. That decision later was amended, with the AGM rescheduled until May 10-13, 2021, still to be held in Bangkok.
It also was the time the association, which has 50 producer members representing more than 90 percent of SR capacity worldwide, started to gauge the extent of COVID-19's impact on the SR industry.
Dropping SR demand
Not surprisingly, the big impact in Asia came in January and February, but the rest of the world has felt the brunt of the pandemic from March until now.
"The recovery in China started in May, and really was faster than I expected," Salinas said.
Overall, the IISRP is expecting a double-digit drop in the market, with the declines in the first half harsher than the projected fall-off for the second half of the year.
The demand declines also are expected to be larger for elastomer types that focus on the auto and tire industries, while some others, particularly styrenic block copolymers (SBS), may see business fall by just single-digit percentages.
That means that emulsion and solution SBR, along with polybutadiene—materials with a majority of business tied to tire production—likely will see demand 12-15 percent less in 2020 than in 2019, according to Roxanna Petrovic, IISRP general director of programs.
The same estimate holds true for EPDM, which has a large portion of its output tied to automotive sealing applications.
SBS, though, may see its demand fall by maybe just 5 percent overall, particularly in Asia-Pacific, where 70 percent of production is for that synthetic rubber type, Petrovic said. The situation, however, may be worse in the Americas and the Europe, Middle East and Africa regions, where volume may drop by double-digits.
The SBS market benefited in such segments as modified asphalt, construction and roofing. "People determined how they could continue working," she said. "Jobs outdoors had some disruptions, but not like inside factories. They figured out they could continue their paving projects around the U.S."
In fact, when putting together its annual book of statistics in 2019 for the synthetic rubber market, a large percentage of new plant projects were expected to be for styrenic block copolymers. "We have seen delays on the projects, but not cancellations, which is good," Petrovic said.