Like many materials, thermoplastic elastomers (TPEs) have been affected by the COVID-19 pandemic and by changes to the automotive market since early 2020. These changes have affected plastics processors throughout the industry.
Robert Eller has been following TPE markets for almost 30 years at his consulting firm, Robert Eller Associates of Akron, Ohio. He recently took some time to give Plastics News his insights into the current TPE market and his thoughts on what the future holds.
Q: What markets have driven TPE growth in 2022 so far?
Eller: Medical has been a driver of TPE growth (and innovation) and has continued to hold steady even in recent difficult times. Automotive has been a steady contributor to growth but has stumbled in the recent falloff in that industry.
We are confident that [automotive] will recover with new innovations in traditional automotive plastics and TPE applications and stimulation from major innovations like electric vehicles and the proliferation of electronics in the automotive and medical sectors.
Q: What impact has inflation and higher interest rates had on the TPE market?
Eller: As in other markets TPEs grow via unit volume growth of the end use markets but, especially in the case of the highly innovative TPE sector, via:
• Substitution for traditional materials. Examples are TPOs (thermoplastic polyolefins) for instrument panel skins and for EPDM in body and glazing seals.
• Creation of new opportunities from a changed environment. The under-hood environment in the high growth EV (electric vehicle) sector and the electronics-rich auto interior are examples of recent sectors that are creating new TPE growth opportunities.
Q: How's the automotive market looking for TPE applications right now?
Eller: The automotive market has been a stimulant to TPE innovation. The shift to electric vehicles and increased reliance on electronics-based systems have begun to shift performance requirements and to create new challenges (EMI shielding, for example) and opportunities for TPEs which are being realized in the current generation of TPE offerings.
How are TPE makers addressing requests for sustainable options?
Eller: TPE suppliers are responding vigorously to the demand for sustainable options and have begun to recognize that there are market penetration and profitability opportunities. Investment in recycling, purification, compounding and product specifications have increased to meet the evolving requirements.
Q: What's the TPE market outlook for the rest of the year and into 2023?
Eller: The TPE market is sustained by innovation in property improvements, for example conductivity, increased temperature range, foamability, improved adhesion to ETPs, and extension of the applications range, [such as] further penetration into electronics applications, for example.
There has been some impact from shifts to offshore production (of components and end-use applications). This is slightly offset by an uptick in reshoring of both components and end use units. TPE sales to the auto sector in North America are slowly recovering from the persistent microchip crisis, but this crisis and associated supply chain disruptions will continue into 2023.