Due to chaotic global events, the market for thermoplastic elastomers is in a challenging phase as is much of the world’s industry. In 2020, the world faced upheaval unlike no other seen since the Second World War. Every aspect of life across the globe has been affected by COVID-19, and the challenges continue in 2021, including those taking place in the thermoplastic elastomers market.
 
In 2021 the TPE market, outlined in The Future of Thermoplastic Elastomers to 2026 report from Smithers,  is estimated at 3.84 million tonnes. It is expected to grow to 5.55 million tonnes by 2026. In 2021 the largest end-use market is automotive, which is estimated to be 1.69 million tonnes. In 2026 the largest end-use market continues to be the automotive sector, which is estimated to be 2.46 million tonnes.
 
In 2021 Asia-Pacific has the largest share of the market at 49.63%. This is expected to increase to 50.12% of the market share by 2026, according to data developed by Smithers data for the new report.
 
Pandemic-related market ups and downs
All of the situations created by the pandemic are having an effect on the markets for thermoplastic elastomers (TPEs). The global TPE market consists of a very wide range of different companies, each reacting differently to this situation. The main effect of the COVID-19 virus is the loss of business due to the imposed manufacturing shutdowns and stay-at-home orders. Reduced overall demand has taken place in a number of critical markets, such as the automotive industry, which in some cases has seen demand drop as much as 30% and in rare cases as much as 40%.
 
On the positive side of the COVID-19 equation is the medical sector, which has experienced robust growth, favouring TPEs, especially TPS. The main medical growth has been for masks, syringe stoppers, vial closures and IV sets. The medical sector is also likely to expand at the highest compound average growth rate of all other applications, including automotive. The combination of the COVID-19 virus and the long-awaited replacement of plasticised PVC will be the main driving forces for the growth of medical TPE applications.
 
TPE use in new vehicles
While having an immediate negative effect on the growth of TPEs during 2020, market dynamics are now presenting a promising scenario for the future of TPEs. Drivers for future growth as identified in The Future of Thermoplastic Elastomers to 2026 include increased use of TPEs in electric vehicles.
 
Increasing demand for electrically-powered vehicles offers an opportunity for increased use of TPEs to contribute to EV technology as well as reducing current EV weight. In general, for the automotive market, TPEs will make a positive contribution to reducing vehicle weight and improving performance, principally in noise, harshness and vibration (NHV) applications. There is impetus to develop newer better performing TPEs to answer the global automotive industry’s challenges. TPE producers with adequate finance and R&D resources will benefit from this trend.
 
Chemical recycling technologies
When looking at related technologies, the TPE market will benefit from the growing chemical-recycling trend that in theory should stabilize the cost of TPE raw materials. The likely outcome will be larger petrochemical companies investing in refinery retrofitting to convert to the use of plastics and other organic materials waste streams.
 
Mechanical recycling has no chance to keep pace with the need for recycling plastics and elastomers. Chemical recycling is the only process worth considering. While depolymerisation and solution recycling are showing great promise, it is with the thermal chemical recycling systems, that the future lies. This is of course not specific to TPEs, but as thermal chemical recycling takes off, TPEs will benefit enormously from the new raw material sources which thermal chemical recycling offers. The inability to satisfactorily recycle plasticised PVC will add to its replacement chances.
 
Regional leaders in TPE production
The world’s larger economies will continue to be better suited to take advantage of the opportunities that are being offered to TPE markets. The United States, Japan and Germany are the leaders in the world’s economic table. It is also these three countries that have the largest investments in petrochemical production and technologies. They are also the largest producers of TPE raw materials and the major supplies of innovative raw material production technologies. All three are growing fast and it is highly unlikely that any other nation will match their overall performance in the immediate future. Although, China is showing the fastest economic growth and is certainly growing relatively fast in TPE investments.