CLEVELAND - Thermoplastic elastomers tend to be more expensive, high-performance materials when compared with commodity resins and thermoset rubber, but they've been hurt by this year's economic slowdown in much the same way.
As a result, the market will be hard-pressed to duplicate the 8-10 percent sales growth it has enjoyed in recent years, according to materials makers interviewed at Performance Elastomers & TPEs 2001, held May 14-15 in Cleveland.
``Our standard businesses are off quite a lot,'' said Gil Martello, senior business development manager for BFGoodrich Performance Materials, a thermoplastic polyurethane maker based in Brecksville, Ohio.
``We weren't hurt by the tech crash as much, since we don't sell much into those markets,'' Martello added. ``But we're seeing definite slowdowns in film and sheet applications in footwear, consumer goods and coated fabrics.''
Dexco Polymers, a Houston styrenic block copolymer-making joint venture between Dow Chemical Co. and ExxonMobil Corp., also is experiencing decreased sales in the construction and automotive markets, said commercial manager Kim McPhillips.
The construction market, where Dexco's products are used in asphalt modification, is seeing a slowdown in government road projects as the Bush administration delays and reviews several Clinton administration-approved programs, McPhillips said.
In automotive, Dexco has felt an impact from double-digit first quarter drops in auto production and sales, even though automotive uses account for less than 10 percent of Dexco's total sales, she added.
TPUs also have been impacted by a supply and demand picture that is usually associated with commodity resins.
``[TPUs] are a specialty kind of polymer, but if you look at the capacity that's out there, you realize there's going to be significant price pressure just to stay competitive,'' BFG's Martello said.
BFG has seen some success with the Estagrip offshoot of its Estane-brand TPU, which the firm introduced at NPE 2000, but customers who are excited about new products are delaying such projects from late 2001 to early 2002.
Lou Rossi, a consultant with Exton, Pa.-based Principia Partners, said two factors are leading TPE makers to feel the economic crunch in 2001: TPEs' big presence in automotive and the relatively small size of the average TPE processor.
``Part of the reality is that automotive is still clearly the largest market for TPE,'' Rossi said. ``There are opportunities for overmolding and co-extrusion, but it's a splash here and a splash there - there aren't any large volume applications.''
Which leads into Rossi's second point.
``There are very few 100,000-pound [TPE] accounts out there,'' he said. ``There are a lot of 5-to-8,000-pound accounts where customers might not have the level of technology or sophistication that drives innovation.
``TPE makers' margins are still better than those for volume materials like talc-filled polypropylene or glass-filled nylon, but they're still feeling the pinch.''