ALBANY, N.Y. -- Global demand for thermoplastic elastomers should rise at a compound annual growth rate of 5 percent in volume and 6.4 percent in value in the 2012-2018 year period, according to a new market report.

TPE consumption hit 3.48 million metric tons in 2011, and will increase to about 4.88 million tons by 2018, the study by Transparency Market Research said. The value of the market will rise from $9.9 billion in 2011 to $15.3 billion by 2018.

The study said styrenic block copolymers are the largest segment of TPEs, about 48 percent of the total in 2011. Used primarily for paving, roofing and in footwear, demand is expected to remain stagnant during the next five years as the market nears maturity.

Thermoplastic vulcanizates are forecast to be the fast-growing TPE product, with demand for the material rising at an annualized rate of 6.6 percent to 2018.

TPEs growth is fueled by increasing demand for lightweight and high-performance materials in the automobile industry. The shift toward replacing PVC with TPEs by major end use industries also is expected to drive TPE demand over the next five years, Transparency Market Research said.

The company warns the volatile nature of raw material prices and the regulatory issues caused by growing environmental concerns are expected to hinder TPE market growth.