U.S. TPE demand to reach 1.4 billion pounds by 2003.

Demand for thermoplastic elastomers (TPEs) in the U.S. is forecast to increase 6.7% per year to 1.4 billion pounds in the year 2003, significantly outpacing gains in the general economy, according to a new study from The Freedonia Group. Despite strong volume gains, overall pricing for thermoplastic elastomers will be sluggish, with the average price per pound rising 2% annually to $2.40 in 2003, leading to a market value of $3.3 billion.

Most of the U.S. thermoplastic elastomer industry's historical growth arose from the displacement of natural and synthetic rubber, due primarily to TPE's many superior performance characteristics. As the U.S. thermoplastic elastomer industry continues to mature, however, future gains in demand will increasingly rely on the development of new products, applications and markets, and the displacement of latex in the medical product market, according to the study.

Motor vehicles will continue to be the largest outlet for TPEs, with gains based on efforts to reduce weight and consolidate components, as well as the recyclability of thermoplastic elastomer parts. Interior applications will achieve the most rapid gains to 2003, particularly in instrument panel and door panel end uses. Other favorable opportunities exist in exterior applications, where TPEs hold strong positions in bumpers, and are gaining acceptance in weather-stripping and profile end uses.

The most rapid annual gains will arise in the smaller medical products market, where environmental concerns involving plasticizers and potential allergies to latex are promoting greater use of thermoplastic elastomers in blood bags, stoppers and closures, and hoses and tubing. As such, many suppliers have recently developed, or are in the process of developing, medical grade thermoplastic elastomers as replacements for natural rubber or standard plastics, such as polyvinyl chloride.

Styrenic block copolymers are the largest product segment, accounting for 44% of total demand in 1998. This product grouping is distinct from other thermoplastic elastomers, with its primary applications occurring in adhesives and sealants, and asphalt modification, as opposed to motor vehicles and industrial machinery.

Among the remaining major types of TPEs, the strongest gains will be achieved by thermoplastic vulcanizate elastomers due to the continued popularity of adding "soft-touch" feel to various products, such as those found in the consumer product and motor vehicle

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US thermoplastic elastomer demand (million pounds)

                                                   % annual

                           1989   1998    2003   98/89   03/98
Thermoplastic
 elastomer demand           532    988   1,365    7.1     6.7
  Motor vehicles            160    315     447    7.8     7.3
  Construction               67    154     209    9.7     6.3
  Consumer product           86    128     175    4.5     6.5
  Industrial product         72    140     197    7.7     7.1
  Adhesives and sealants     83    130     167    5.1     5.1
  Wire and cable,
   medical and other         64    121     170    7.3     7.0