TPE demand to increase 6.4% per year through 2007.

Demand for thermoplastic elastomers worldwide is forecast to grow at a 6.4% yearly rate through 2007, reaching 2.25 million metric tons, according to a new report by Freedonia. The Cleveland-based research firm says value gains will expand at an even stronger 7.8% per year to $8.5 billion over the period due to the increasing number of applications which require more expensive types of TPEs. The world TPE market will benefit from favorable outlooks for key indicators, including GDP levels, fixed investment spending and motor vehicle production, all of which will accelerate through 2007 compared to the 1997-2002 period.

The study, "World thermoplastic elastomers," says TPEs will continue to find the majority of their use as replacements for natural and synthetic rubber, as well as for rigid thermoplastics and metals. TPEs are also gaining many new applications in which they are over-molded onto rigid plastic or metal components to enhance ergonomic or soft touch features on a wide range of products, particularly consumer goods.

Freedonia states that global TPE sales will remain concentrated in the developed markets of the U.S., Japan and Western Europe, particularly for higher performance materials such as copolyester elastomers (COPEs) and thermoplastic vulcanizates (TPVs). However, many developing countries, particularly in Asia, are rapidly expanding their positions in TPEs. These countries are initially focusing on low-cost styrenic block copolymers (SBCs), but are also diversifying into compounded thermoplastic polyolefins (TPOs) and thermoplastic polyurethanes (TPUs). In particular, China has emerged over the last dec-ade as a significant market for TPEs, with a large portion of initial demand related to SBCs and other TPEs used in the country's sizable footwear industry, the study says.

Motor vehicles will remain the largest market for TPEs at the global level, with demand expected to be near 630,000 mt in 2007. The sustained solid gains forecast for TPEs in this market are attributable to the development of new products for exterior (e.g., body seals) and interior (e.g, instalment and door panel skins) applications at the expense of ethylene-propylene diene monomer (EPDM) and polyvinyl chloride (PVC). The fastest growing sectors through the time period will remain the consumer and sporting goods sectors according to Freedonia.

World thermoplastic elastomer demand ('000 metric tons)

                  1997    2002    2007   % annual growth

                                          02/97   07/02

North America      446     561     752      4.7     6.0
Western Europe     335     450     558      4.9     4.4
China              163     288     449     12.1     9.3
Japan              110     131     158      3.6     3.8
Other              156     220     333      7.1     8.6
TPE demand       1,230   1,650   2,250      6.1     6.4

Source: Freedonia