CEH Report

Table of Contents

Abstract

Styrenic block copolymers (SBCs) are the largest-volume and lowest-priced (only for SBS) member of the family of thermoplastic elastomers (TPE)—polymers that have rubberlike properties, but process as thermoplastics. The other major TPEs include thermoplastic polyolefins (TPO/TPV), polyurethanes (TPU), copolyester-ether elastomers (COPE, TPE-E) and polyamide elastomers (several abbreviations are in use such as PEBA, PAE, TPE-A or COPA).

The high volatility of feedstocks (butadiene, isoprene and styrene), the recovery from the worldwide economic crisis in 2008–2009, and overcapacity in China are the major issues for profitability/margins in the SBC business.

There are three major types of SBCs:

• Styrene-butadiene-styrene (SBS) block copolymers
• Styrene-isoprene-styrene (SIS) block copolymers
• Hydrogenated styrenic block copolymers (HSBC), including styrene-ethylene-butylene-styrene (SEBS), SEPS and SEEPS
  

In recent years, China has become the largest world market for styrenic block copolymers, surpassing North America and Europe. China is the leading footwear producer in the world, followed by India, and this industry consumes vast amounts of rubber and elastomers, including styrenic block copolymers (especially SBS).

The following pie chart shows world consumption of styrenic block copolymers:

After recovery from the economic crisis, consumption of SBCs in all regions has continued to grow, although the growth rate is declining with the maturity of the markets. The decline of the footwear market, with its shift to low-labor-cost areas, has affected Western Europe the most, but even in China, demand from this industry is growing at a slower pace.

Global consumption of SBCs is expected to grow at an average annual rate of approximately 4–5% during 2010-2015. In the developed regions, consumption will be driven by SBC use in the compounding and adhesives and sealants markets. In Asia (excluding Japan), polymers and asphalt modification, as well as compounding, will drive consumption, since consumption growth in footwear has considerably slowed. Central and Eastern Europe has become an interesting market, with overall demand forecast to grow 8–10% per year through 2015, even faster than in China.

By the end of 2010, the seven largest producers—Kraton, Sinopec, Lee Chang Yung, Dynasol Elastomeros, TSRC, Chi Mei and Polimeri Europa—had over 70% of global production capacity.

In Asia, especially China, further capacity expansions have been announced or are already under construction. The more-than-twofold expansion of capacity in China, together with lower SBC demand resulting from the impact of the financial and economic crisis in 2008–2009, led to severe overcapacity in China and the Asia Pacific region.

The overcapacity in China led to a 55–60% utilization rate during 2010. The overcapacity situation in China, Taiwan and the Republic of Korea will intensify competition in Asia as well as in other world regions.