Smithers research reveals new growth opportunities for high-performance elastomers

LEATHERHEAD, U.K.—Thermoset, thermoplastic and other high-performance elastomers are continuing to find new applications beyond tires, according to the latest research from consulting company Smithers.

Studying the current and future demand for 14 different grades in 21 end-use industries, the report, "The Future of Natural and Synthetic Rubber for Non-tire Applications to 2027," estimated that demand for elastomers in 2022 will reach a total of 18.66 million metric tons.

As multiple sectors recover from the disruption of 2020-21 and increase order volumes, Smithers said it predicted that consumption would increase at a compound annual growth rate (CAGR) of 3.4 percent to reach 22.9 million metric tons in 2027.

In terms of market environment, Smithers said that, despite stability returning, elastomers and end-use industries are reacting to new challenges.

In particular, it noted, raw material input and logistics costs remain elevated, and the Russian invasion of Ukraine is placing additional pressure on supply chains.

In response to these cumulative factors, price rises of over 40 percent have been recorded in recent months.

According to Smithers, the "realities of post-COVID world" had prompted a spate of M&A activity.

"Several larger firms are looking to diversify their elastomer portfolios," the report said.

"Others, notably Bridgestone, are looking to divest lower profitability divisions as they implement business rationalization plans," it added.

From a material perspective, Smithers said that thermoplastic elastomers will continue to replace thermoset elastomers in multiple applications, with the former set to grow 2.7 times faster than the other over the forecast period.

Natural rubber remains the largest single material used in non-tire applications equivalent to a projected 3.12 million metric tons in 2022.

Across 2022-27, success for elastomer suppliers will increasingly be dependent on optimizing grades for new applications, and improving performance to match changing end-use expectations.

The largest market segment is transportation, where brake and other hydraulic systems will remain the main applications.

Under-the-hood components will see some negative impact from the switch to electrical vehicles, but demand will remain robust in exterior fixtures, such as windows, runners and seals, and LED lighting.

The fastest growing transport segment will be EV battery housings, creating extra demand for silicone elastomers carrying heat conductive fillers, said the Smithers report.

Industrial products will provide other markets for elastomers in belts, hoses, seals, gaskets and tubing.

Lower temperature applications will continue to employ ethylene-propylene dimer rubber (EPDM), with polyurethane and ultimately acrylate elastomers used for higher performance applications.

According to Smithers, building, construction and civil engineering sectors are also recovering confidence following a collapse in demand during the pandemic.

The lead sub-segments will be thermoset elastomers for use in roofing; EPDM in flexible pipes, door and window seals, and increasingly flooring.

Furthermore, demand for styrene-butadiene-styrene (SBS) will likely increase as it can be added to bitumen to improve the durability and temperature range of road surfaces.

Smithers said that the medical market was the only sector that did not collapse during the 2020-22 period, as demand grew for TPEs used in syringes, masks and medical tubing.

This peak, however, will begin to subside but will remain elevated, with TPEs benefiting from the phase out of PVC components in medical devices.

The fastest growth rate, close to 5.0 percent CAGR, will be in electrical and electronic goods.

Here elastomer suppliers will benefit from new sales of both household appliances and personal electronic devices. In the short-term, however, shortages in semiconductor supply chains will depress this recovery.

Published June 17, the report investigated elastomer types such as natural rubber, butadiene rubber, styrene solution butadiene rubber, emulsion solution butadiene rubber, EPDM, silicone elastomers and high-performance elastomers such as TPEs and TPOs.

End-use applications studied included automotive, aerospace, maritime, rail, electrical/electronic appliances, building/construction/civil engineering, footwear, industrial products, and medical.