Fairlawn, Ohio — The global thermoplastic elastomer market is maturing in some sectors, but still has areas of growth, according to market analyst Robert Eller.
“There's global competition now,” Eller said at TPE Topcon 2016, a conference hosted by the Society of Plastic Engineers, Sept. 20-22 in Fairlawn. “Some TPEs are viewed as commodities, and their growth is slowing.
“The structure for those TPEs is shifting because of price pressure and overcapacity,” he added. “There's saturation in some market sectors.”
Use of thermoplastic polyolefins (TPOs) in auto bumper fascias and of thermoplastic polyurethanes (TPUs) and styrenic block copolymers (SBCs) in footwear are two TPE uses that are at the saturation point, said Eller, president of Robert Eller Associates in Akron, Ohio.
Uses of various TPEs for “soft touch” in sports, appliance, leisure and tool markets are areas that are mature and close to saturation, according to Eller.
“The cycle was dominated by major material companies at first, then by compounders, and then the market saw price decline and more competition,” he said.
Most recently the TPE market has seen a second wave of Asian and European compounders moving into North America to follow customers. They've done so with greenfield projects, toll compounding, distribution and acquisition, according to Eller, who founded his firm in 1991.
Companies in this second wave include Kingfa, LCY, Mitsubishi, Polymax, Pret, So.f.ter and TSRC.
Asian compounders in particular “want to access Western markets and to learn Western marketing skills,” he explained. “They have compounding skills and lower-cost ways to serve lower-priced segments. And some Chinese compounders have moved up the quality scale.”
Competition among different types of TPEs also is affecting the market. “Boundaries are getting blurred,” Eller said. “SBCs are challenging TPUs when [TPUs] are over-engineered, and SBCs are competing with copolyesters in airbags.”
Copolyesters also are competing with TPUs in some high-heat application. “What's happening is that we're becoming better compounders,” Eller explained.
TPEs also could benefit by improving their performance in certain attributes.
“Customers still want TPEs for soft touch, silky feel and wet grip, but the materials could use higher temperature resistance — they need to go above 150° C for underhood applications,” Eller said.
Scratch resistance in TPEs also could be improved needs improvement, he added. And sealing performance could be improved to approach that of butyl rubber and silicone.
But all is not lost in the TPE field. Eller cited use of TPU bead foams made by BASF SE in footwear as a strong new application.
He added that using polyolefin elastomers as modifiers in SBCs is allowing for the creation of new low molecular weight grades that can be used in new applications.
TPEs still have many opportunities in the auto market.
“Performance standards are changing, and that creates new opportunities,” Eller said. Thermoplastic vulcanizates and SBCs are challenging EPDM materials in auto glazing seals. TPEs also are moving into door seals and trunk seals. And even a basic market like floor mats presents a 300-million-pound opportunity for SBCs, according to Eller.
Low-cost TPOs also are seeing growth in auto interior skins, and slush-molded TPEs from Kraton Polymers are expected to be used in auto panels in the near future.
In the medical market, TPEs continue to see high growth despite early penetration. Prices for TPEs sold into medical applications can be two to three times higher than those sold into commodity applications. SBCs have been dominant in TPE medical uses, but copolyesters also have found a home in breathable films and gowns.
Graphene — a form of carbon — also has extended TPEs into conductive and “smart” applications, Eller said.
Geographically, TPE investment “has been flowing both ways,” he added, although Asia still represents major TPE volume growth. “Technology went to Asia then back-flowed to North America as companies followed their customers,” Eller said.
And although emerging market growth has slowed in recent years, Eller said that China and India remain growth markets for TPEs.