Thermoplastic Elastomers Market

The thermoplastic elastomers market is projected to grow from USD 26.9 billion in 2023 to USD 35.4 billion by 2028, at a CAGR of 5.6% during the forecast period. The thermoplastic elastomers market is driven by growing automotive sector during the forecast period.  Asia Pacific is dominating region for automotive sector in the countries like China, India, and other Southeast Asian countries.

Attractive Opportunities in the Thermoplastic Elastomers Market

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Thermoplastic Elastomers Market Dynamics

Driver: Growing penetration of EVs to drive the demand

The growing penetration of Electric Vehicles (EVs) is poised to significantly boost the demand for Thermoplastic Elastomers (TPEs) as they play a pivotal role in the automotive industry's transition toward sustainability. TPEs are favored for their lightweight properties, impact resistance, and flexibility, making them an ideal choice for components such as gaskets, seals, wire insulation, and interior applications in EVs. As the EV market continues to expand, TPEs will be integral in addressing the unique engineering challenges posed by electric vehicles while contributing to improved energy efficiency and reduced emissions, driving substantial growth in the TPE market.

Restraint: Higher cost of TPE than that of conventional materials

The manufacturing process of TPE requires huge investments and is complex than that of conventional materials such as polyethylene, PVC, rubbers, and polyurethane. The manufacturing device functions at high temperatures with a high level of technical expertise to manufacture TPE. The vast investments and complex manufacturing processes have increased the cost of TPE. The high production cost of TPE has restricted its large-scale use, primarily in high-end applications. For example, compounding grades of polyethylene, polypropylene, acrylonitrile butadiene styrene, and polyurethane are developed to have properties similar to TPE and are available at a lower price than that of TPE. This creates high competition for TPE in a few end-use industries such as industrial machinery, building & construction, and electronics. Also, the increasing price of raw materials affects the price of TPE.

Opportunity: Emerging market for biobased TPE

Biobased TPE is made from renewable resources such as vegetable oils and fatty acids. It offers equivalent-to-better properties than the traditional TPE, mainly for the electronics, sporting goods, and footwear industries. The manufacturing of biobased TPE improves its biodegradability and reduces the use of non-renewable resources. Continuous innovation and commercialization of biobased TPE are creating new opportunities for the industry players. Also, many synthetic TPE manufacturers have shifted their focus toward developing sustainable and environment-friendly products.

For instance, BASF and Lubrizol manufacture biobased TPU for the footwear, automotive, industrial, electronics, and textile industries. Various biopolymers such as are corn starch, wheat starch, poly hydroxybutyrate (PHB), polylactide (PLA), castor oil, and palm oil are used to produce biobased TPU.

Newly improved biobased TPU is comparable in properties to conventional TPU and has an advantage due to the high raw material prices of diisocyanates and polyols. R&D for producing biobased TPU is creating opportunity for manufacturers.

Challenges: Intra thermoplastic elastomer segment replacement

There are different types of thermoplastic elastomers available in the market. They differ by cost and requirement of performance. A specific type of thermoplastic elastomer is chosen according to the profit margin of the applications. The emerging trend of simplifying the complexity in choosing a specific type of thermoplastic elastomer is challenging the growth of other types of TPE. By focusing on specific types and enabling them to perform other thermoplastic elastomers' functions is reducing the number of thermoplastic elastomer types available.

This situation has triggered research activities to increase the versatility of a specific type of TPE and reduce their costs. Such a situation prevails in the automotive thermoplastic elastomers market where TPO is replacing TPV. TPO is expected to replace PVC and TPU films in automotive applications during the forecast period. Hence, intra TPE segment replacement is a challenge for the growth of the overall market.

ECOSYSTEM

By Type, Polyether Block Amide Elastomers accounted for the highest CAGR during the forecast period.

Polyether Block Amide (PEBA) elastomers are experiencing rapid growth as the fastest-growing type of TPE due to their unique combination of properties that make them suitable for a wide range of applications. PEBA elastomers exhibit excellent flexibility, resilience, and resistance to chemicals and UV radiation, making them ideal for demanding industries such as sports and recreation, medical devices, and automotive. Their compatibility with advanced manufacturing techniques like 3D printing also opens new opportunities for customized and complex designs. Additionally, the increasing emphasis on sustainability further fuels the demand for PEBA elastomers, as they are recyclable, aligning with environmental goals and fostering their adoption in diverse markets.

By End-use Industry, Footwear accounted for the highest CAGR during the forecast period.

The footwear industry is poised to emerge as the fastest-growing end-use segment in the thermoplastic elastomers (TPE) market, driven by the increasing demand for versatile, lightweight, and durable materials for shoe manufacturing. TPEs offer a wide range of benefits, including flexibility, impact resistance, and ease of processing, making them an ideal choice for outsoles, midsoles, and other components in footwear production. Furthermore, as sustainability gains prominence, TPEs offer the added advantage of recyclability, aligning with the growing eco-consciousness in the industry. This confluence of factors positions TPEs as a key enabler for innovation and growth within the footwear sector, while meeting consumer expectations for both comfort and sustainability.

Asia Pacific is projected to account for the highest CAGR in the thermoplastic elastomers market during the forecast period.

The Asia Pacific region has emerged as the fastest-growing market for Thermoplastic Elastomers (TPEs) due to a confluence of factors such as robust industrialization, burgeoning automotive and manufacturing sectors, and a rising middle-class population driving consumer goods demand. This region's increasing infrastructure development and urbanization further boost TPE consumption in applications like construction and transportation. Moreover, a shift towards lightweight and eco-friendly materials aligns with the demand for TPEs, making Asia Pacific a pivotal market for these versatile materials in a wide array of industries, including automotive, packaging, and consumer goods.

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Key Market Players

The thermoplastic elastomers market comprises key players such as Arkema SA (France), Asahi Kasei Corporation (Japan), BASF SE (Germany), The Dow Chemical Company (US), Covestro AG (Germany), Huntsman Corporation (US), Exxon Mobil Corporation (US), Mitsubishi Chemical Group Corporation (Japan), Lubrizol Corporation (US), and DuPont de Nemours, Inc. (US) and others. Expansions, acquisitions, joint ventures, and new product developments are some of the major strategies adopted by these key players to enhance their positions in the thermoplastic elastomers market.

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Scope of the Report

This research report categorizes the global TPE market on the basis of application and region.

TPE Market on the basis of type:

• Styrene block copolymer (SBC)
• Thermoplastic polyurethane (TPU)
• Thermoplastic polyolefin (TPO)
• Thermoplastic vulcanizate (TPV)
• Polyester ether elastomer (COPE)
• Polyether block amide (PEBA)

TPE Market on the basis of end use industry:

• Automotive
• Building & Construction
• Footwear
• Wire & Cable
• Medical
• Engineering
• Others

TPE Market on the basis of region:

• North America
• Europe
• Asia Pacific (APAC)
• Middle East & Africa (MEA)
• South America

The market has been further analyzed for the key countries in each of these regions.

Recent Developments

• In March 2023, Arkema SA and Engie SA signed a deal for 300 GWh/year of renewable biomethane in France to reduce the carbon footprint of their 3D printing materials: bio-based high performance Rilsan polyamide 11 and Pebax elastomers.
• In January 2022, Arkema SA expands its global manufacturing capacity of Pebax Elastomer by 25% through an investment at its Serquigny plant in France.
• In July 2022, Asahi Kasei Corporation launched Plastic North America (APNA) and introduced Soform, a new engineered resin series as a part of its diverse Thermylene family portfolio of specialty chemically-coupled glass fiber reinforced polypropylenes.
• In July 2022, BASF SE has officially approved the construction of second phase of its Verbund site in Zhanjiang, Guangdong, China, with a USD 10 billion investment plan by 2030. The project includes a steam cracker and downstream petrochemical plants. It's set to become BASF's third largest Verbund site globally, operational by 2030, with ongoing projects such as engineering plastics production and a thermoplastic polyurethanes (TPU) plant.
• In January 2021, Covestro strengthens the portfolio of alternative raw materials. The product line of partially bio-based TPUs is now marketed under the brand name, Desmopan.

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