Attempts to cut corners and costs in an ever-competitive environment are changing the shape of the thermomplastic elastomer market, according to industry analyst Robert Eller.
``The value chain is shaky,'' Eller said at TPE Topcon 2003 in Akron. ``TPE prices may be eroding because of Asian pressure on both molded parts and raw materials. There's also been an increase in the number of TPE compounders and that's led to lower-priced TPEs like thermoplastic olefins gaining share vs. styrenic block copolymers.''
The market shift is evident in the increasing number of Tier 1 automotive original equipment manufacturers that are doing their own in-line TPE compounding instead of working with an outside compounder, said Eller, president of Akron-based Robert Eller Associates Inc.
Tier 1 suppliers are making the compounding move, which can save them as much as 12 cents per pound, because of pressure from automotive suppliers, he said. For example, Eller pointed out that Johnson Controls Inc. has done a good amount of in-line compounding for the door trim panels it makes for 2002 and 2003 model Mercedes vehicles in Europe.
Eller added that smaller compounders have ``glommed on to'' PVC-based TPEs instead of more costly materials in applications where they need only minor amounts of cross-linking.
Other TPE trends noted by Eller included:
* A need for thermoplastic vulcanizate makers to improve the compression set performance of their material in cold temperatures in order to penetrate the door seal market. Such a move could double or triple the size of the TPV market, Eller said.
* Use of TPE skins over polypropylene foam in auto doors.
* Big opportunities for TPEs in vibration dampening. Much of that 375 million-pound annual market currently is occupied by ethylene propylene diene monomer.
* Increased automaker focus on impermeability, drape and higher temperature resistance in new materials.