The high growth rates for NBR latex comes at a time where the rest of the synthetic rubber market is facing significant challenges that impact business levels and makes the outlook uncertain. COVID-19 has impacted most industries, and the SR sector is no exception, she said.
"Supply chains have been disrupted, unemployment rates are up and the public health crisis has intensified in many countries," Petrovic said. "Despite vaccine rollouts around the world and stimulus packages, the recovery from the pandemic crisis has been uncertain and uneven."
While the global economy is projected to expand by about 6 percent in 2021, she said that growth will be concentrated in a few major economies, with most of the emerging markets and developing economies lagging behind.
"The growth depends to a large extent on the path of the pandemic, vaccinations and fast containment of the virus," Petrovic said. "And this outlook remains subject to downside risk due to possible COVID-19 waves and financial stress among emerging economies' debt levels.
Automotive remains the primary driver of SR demand, with the main tire elastomers—ESBR, solution SBR and polybutadiene (BR)—accounting for nearly 60 percent of global capacity. But tire elastomers also contributed the most to the overcapacity situation that has plagued the SR market for a number of years.
"BR and SSBR were expanding faster than other elastomers due to the demand of HP tires and green tires," she said. "However, this trend is slowing down on these two rubbers, and we've seen gradual expansion on EPDM and butyl rubber."
After steep declines in both original equipment and replacement tire sales in 2020, the aftermarket is projected to bounce back strongly this year, but not return to 2019 levels until 2022, according to Petrovic. Global sales of light vehicles are projected to reach 87 million units in 2021, though component shortages (such as the lack of available computer chips) and other supply chain disruptions could depress this figure.
Looking to the future, the rise of electric vehicles, with market share to reach up to 30 percent by the end of 2030, will have an impact on SR producers, she said. Customers will be more focused on auto components such as electronics and software, with these becoming an important decision-making point when purchasing a new vehicle.
"We will have smart cars, so we will need smart tires and materials," Petrovic said. "The tire sector must focus on sustainability with the need for more sustainable materials, design and manufacturing processes.
"Tires must be smart, connected and able to provide data."
The shift to EVs also will affect the underhood components in vehicles. The compartment of a Ford truck, for example, has several rubber components, while Tesla's has very few elastomer parts.
She said the mobility shift will require fewer fluid transmission hoses, fewer and smaller transmission belts, but more body and weather seals. This may be an opportunity for growth for suppliers of EPDM.
There may be some improvements in the overcapacity problems in the SR industry in coming years, as there aren't nearly the number of planned capacity additions as in recent years, which has led to low operating rates for many of the synthetic rubber types.
"Consolidation also is happening, and this will give some shift to re-think how we will use the capacity," she said.