TPE demand to reach 3.1 mmt in 2009.

Global demand for thermoplastic elastomers (TPEs) is forecast to increase 6.2% per year through 2009, reaching 3.1 million metric tons, according to a study by the Freedonia Group. Value gains will expand an even stronger 7.4% per year over the same period. This will be due to the increasing number of applications that require costlier types of TPEs and high energy prices, which will raise the TPE production costs, according to the study.

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 will continue to gain new applications in which they are overmolded onto rigid plastic or metal components to enhance ergonomic or soft touch features on a wide range of products.

Through 2009, China's TPE market (the world's largest market in metric tons) will expand and diversify rapidly based on the country's significant positions in the production of many of the key products manufactured with TPE parts and components. Freedonia says that currently, a large portion of TPE demand in China is devoted to the country's massive footwear industry. Nevertheless, with the notable exception of China, global TPE sales will remain concentrated in the developed markets of the U.S., Western Europe and Japan, particularly for higher performance materials such as copolyester elastomers (COPEs) and thermoplastic vulcanizates (TPVs). Growth prospects through 2009, however, will be strongest in the developing countries. Most developing markets have initially focused on low-cost styrenic block copolymers (SBCs) due to their existing positions in styrene-butadiene and polybutadiene rubber (which also helps domestic production of SBCs), but some such as China are also significantly diversifying into compounded thermoplastic polyolefins (TPOs) and thermoplastic polyurethanes (TPUs).

Motor vehicles will remain the largest market for TPEs at the global level, with demand reaching 890,000 mt in 2009, according to Freedonia. The sustained solid gains forecast for TPEs in this market are attributable to the development of new products at the expense of ethylene-propylene diene monomer (EPDM) and polyvinyl chloride (PVC).

TPOs will remain the largest volume segment, as these materials bolster an already formidable position in exterior applications with rising use in interior applications. The smaller consumer and sporting goods sectors will remain the fastest growing market for TPEs through 2009. Gains will be primarily attributable to expanding uses in sporting goods and personal care goods according to the study.

World TPE demand ('000 mt)

                                       % annual growth

                  1999    2004    2009   04/99   09/04

North America    493.8   628.7   785.5     4.9     4.6
Western Europe   389.1   503.4   608.0     5.3     3.8
China            390.0   690.0   1,052    12.1     8.8
Japan            126.5   153.0   183.5     3.9     3.7
Other regions    214.6   324.0   471.0     8.6     7.7
Total world      1,614   2,300   3,100     7.3     6.2