Favorable Developments in Automotive and Construction Industries to Boost Demand for EPDM in Emerging Economies, reports TMR
The global ethylene
propylene diene monomer (EPDM) market is marked by an extremely
high level of consolidation, with the top six companies accounting
for over 80% of the market in 2015, states TMR in a recent report.
These top six companies, including ExxonMobil Chemical Company, Kumho
Polychem, LANXESS AG, Mitsui Chemicals, Lion Copolymer LLC, and The
Dow Chemical Company, are the key determinants of the overall
development of the market presently.
However, a large
number of local vendors are venturing in the global EPDM market, a
trend which is expected to intensify the competition substantially in
the market in the next few years. This trend is also expected to
bring down the level of consolidation, leading to the development of
sustainable growth prospects for new entrants as well. Mergers and
acquisitions are likely to have a major impact on the overall
dynamics of the market and companies are expected to increase their
focus on emerging markets with promising growth opportunities.
Rising Demand
for EPDM from Automotive Industry Key Driving Force
The automotive
industry is the most prominent consumer of EPDM, accounting for a
share of over 40% in the overall consumption of EPDM in the global
market in 2015. The automotive industry has seen significant
expansion in the past few years, especially across developing
economies such as Asia Pacific and Latin America. Developed regions
such as North America and Europe have also witnessed sustainable
growth in the automotive industry post the economic downturn of 2008.
In the next few years as well, the automotive industry will exhibit
favorable growth in the global market and present vast growth
opportunities for the EPDM market.
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The sector of
thermoplastic modification is also expected to present promising
growth opportunities for the global EPDM market in the next few
years. The vast rise in the global demand for thermoplastic olefins
(TPO) and thermoplastic vulcanizates (TPV) across industries such as
construction, packaging, medical devices, and consumer goods will
help fortify the projected trend.
Oversupply of EPDM
Owing to Consistent Capacity Additions to Intensify Price Pressure
The global EPDM
market has witnessed a prominent shift in its demand-supply dynamics
in the past few years. In 2010, the global demand for EPDM
outstripped the global supply. However, the situation has almost
reversed in the past few years. Owing to substantial capacity
additions by major vendors such as LANXESS, Mitsui Chemicals, Kumho
Polychem, and ExxonMobil Chemical Company post the recent economic
depression, the market presently struggles with the oversupply of
EPDM.
This factor is
expected to expedite the competition in the market, adding to the
price pressures of existing manufacturers. As a result, the growth
prospects of the market are expected to be hampered to a certain
extent in the next few years.
Emerging Economies
to Present Most Promising Growth Prospects
The global EPDM
market is expected to expand at a healthy pace of 5.4% over the
period between 2016 and 2024. The market, which had a valuation of
US$2.63 bn in 2015, is expected to rise to US$4.20 bn by 2024. From a
geographical perspective, emerging economies such as Asia Pacific and
Latin America are expected to lead to the most lucrative growth
opportunities for the global EPDM market in the next few years. Asia
Pacific, which accounted for the dominant share of over 40% in the
overall global EPDM consumption in 2015, is expected to remain the
dominant regional market over 2016 to 2024 as well.
This review is based
on a recent market research report published by Transparency Market
Research, titled “Ethylene Propylene Diene Monomer (EPDM) Market -
Global Industry Analysis, Size, Share, Growth, Trends, and Forecast
2016 – 2024.”
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