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Amidst the volatilities in raw materials supplies and costs, demand for synthetic rubber is continuing to move forward, according to Angelica Buan in this market report.
The new year opened with a fete for sectors using rubber. With the continuing drop in prices of crude oil, projected to bottom to US$49/ barrel, it is expected that prices of raw materials, including prices of rubber, will drop further.
The situation may justify the forecast from the recently released World Rubber Industry Outlook (WRIO) by Singapore-based International Rubber Study Group (IRSG). It predicted that world total rubber demand will jump 1.8% or 30.3 million tonnes in 2016 from 4.1% or 29.1 million tonnes in 2015.
With this increase, IRSG says that demand for synthetic rubber (SR) this year will reach 16.8 million tonnes, climbing to 17.5 million tonnes in 2016.
Come 2023, this demand could even soar to 21.5 million tonnes; topping the consumption figures for natural rubber (NR). The latter is pegged at 12.3 million tonnes this year and expected to climb 12.9 million tonnes in 2016, further increasing to 16.5 million tonnes in 2023, according to the study.
On track with tyre segment
The tyre segment will largely benefit from the cheap oil, since raw materials will be cheaper, causing in a price drop for tyres. However, some tyre manufacturers are refusing to enforce the price cuts.
In India, large tyre producers including MRF, CEAT, JK Tyres, and Apollo Tyres have relented to reducing the tyre prices across segments to as much as 4% in light of the declining price of raw materials.
MRF has cut prices of its commercial tyres by 1%-2% and Apollo Tyres by 2%-3% across the board on its tyres. In the truck and tyre segments, JK Tyres brought prices down by 1%-2% and CEAT, also reduced prices for its truck tyres by 1%-1.5%.
What is certain is that the downward trend for rubber materials will result in higher gross margins for tyre makers and dealers, according to industry analysts.
NBR – strong contender in automotive
The automotive sector, as well as other industrial sectors will continue to post high demand for nitrile butadiene rubber (NBR), according to a report by Research and Markets. The Global Nitrile Butadiene Rubber (NBR) Market 2015-2019 report says NBR will have a CAGR of 6.85% from 2014- 2018.
Commonly known as nitrile rubber, NBR is formed by the copolymerisation of butadiene and acrylonitrile. NBR is mainly used for rubber products in key segments and in various applications owing to its suitable properties, including resistance to heat, puncture, fuel, and many chemicals.
For the automotive sector, the synthetic rubber is widely used in the manufacture of brake liners, dashboards, brake pads and kick panels, given that there is an increase in the demand for automotive components. Likewise, it is also suited in many other applications, such as hoses, belts/cables, O-rings and seals, industrial and medical gloves, moulded and extruded products, adhesives and sealants, sponges, footwear and others.
The report forecasts the market to witness continuous investments in capacity additions. Manufacturers are investing in new machinery to maximise the use of raw materials and to minimise costs.
While the requirement for NBR is generally forecast to surge, substitutes such as thermoplastic polyester elastomers and thermoplastic polyolefins are replacing NBR in the PVC modification sector, according to Research and Markets, specifying the North American market to be experiencing a sluggish growth in this area.
Asian growth in other applications
Growth in synthetic latex is also continuing to prop up demand, say analysts. Southeast Asia is the fourth largest market for synthetic latex polymers, accounting for 8% of the global consumption, according to a study presented by Kline & Company.
Malaysia, Thailand, and Indonesia make up for 82% of synthetic latex polymer consumption in the region.
Of the polymers, acrylonitrile butadiene (AB nitrile) is the leading product type, accounting for 44.6% of the total consumption in the region by volume, followed by styrene acrylics, according to the Synthetic Latex Polymers: Southeast Asia Market Analysis and Opportunities report.
It says that latex consumption in Malaysia and Thailand is dominated by AB nitrile due to the large importance of the glove dipping application in these two countries.
Meanwhile in Indonesia, the product mix is dominated by styrene acrylics. Thailand dominates in consumption of pure acrylics, which is the thirdlargest type of synthetic latex polymers consumed in the region.
Kline & Company said that the positive GDP growth in these country markets makes up for the region’s synthetic latex polymers growth, forecast to rise at a CAGR of 6.5% through 2018.
Silicones gearing up for transport and healthcare
Meanwhile, another class of SR, silicone elastomers are likewise carving a niche in various segments including automotive, electrical & electronics, healthcare, and consumer goods.
According to a report from research analysts MarketsandMarkets, the Asia Pacific region is the largest market for silicone elastomers, globally, both in terms of volume and value. It is followed by Europe, China, India, South Korea, Brazil, and the Middle-East. Its fast growth is driven by substantial ventures across the aforementioned industries.
The current market size of silicone elastomers in terms of value is estimated to shoot up to US$11,014.26 million by 2019, from US$6,500.60 million in 2013, and is projected to reach a CAGR of 9.28% between 2014-2019.
Seen to boost these industries is the focus on R&D to develop future advancements and technology modifications of silicone elastomer applications to replace natural rubber and other rubber substitutes in broader applications.
Silicones are posting gains in the automotive and transport sectors, whereby the polymer is used in parts such as gaskets and seals.
Global Industry Analysts (GIA) project that the global gaskets and seals market will reach US$45.8 billion by 2020, driven by technology advancements, and stringent safety policies aimed at reducing hazardous leaks in process industries.
New materials developed are also making headway into the gaskets and seals market, for eg, EMI shielding gaskets launched by US-based Stockwell Elastomerics. The custom gaskets are fabricated from closed cell silicone foam, closed cell silicone sponge and fluorosilicone sponge with edge bonded knitted monel mesh.
In the healthcare segment, silicones are either used alone or combined with other materials to enhance functions. Leading silicones firms like Dow Corning and Shin-Etsu Silicones have developed products that are combining silicones with other materials to render more effective results and compliance to standard safety guidelines.
Recently, Michigan-headquartered Dow Corning, announced that its TPSiV materials, a hybrid of thermoplastic polyurethane (TPU) and crosslinked silicone rubber have been tested according to US Pharmacopeia’s (USP) guidelines. They have shown to be non-irritating and non-sensitising in skin contact applications, thus making them suitable options for wearable electronics applications, such as wrist bands for smart watches and fitness trackers, as well as for device accessories such as ear buds.
Meanwhile, Shin-Etsu Silicones has introduced the Select-Skin RTV elastomer series for applications requiring a skin-like material with tough performance properties.