Driven by their use as replacements for natural and synthetic rubber, as well as for rigid thermoplastics and metals, thermoplastic elastomers (TPEs) are forecast to grow well. Global demand for TPEs is forecast to increase 6.3% pa through 2011 to 3.7 mln tons, as per Freedonia. Increasing applications of value gains will expand at a faster pace of 7.5% pa to US$14.9 billion over the same period- driven mainly by an increasing number of applications that require costlier types of TPEs and higher energy prices that will raise TPE production costs. Despite China expanding its share of the world market from under 30% in 2006 to more than 33% in 2011, USA will remain the world's largest manufacturer of some products such as olefinic based TPEs. Demand growth for TPEs will slow down in most developed countries, as several easy substitutions for thermoset rubber have already been made in developed economies. Growth prospects through 2011, however, will be strongest in developing countries. Most developing markets have initially focused on low-cost styrenic block copolymers (SBCs) due to their existing positions in styrene-butadiene and polybutadiene rubber (which also helps domestic production of SBCs), but some such as China are also significantly diversifying into compounded thermoplastic polyolefins (TPOs) and thermoplastic polyurethanes (TPUs). Nevertheless, with the notable exception of China, global TPE sales will remain concentrated in the developed markets of the US, Western Europe and Japan, particularly for higher performance materials such as copolyester elastomers (COPEs) and thermoplastic vulcanizates (TPVs).

Through 2011, China's TPE market (the world's largest market in metric tons) will expand and diversify rapidly based on the country's significant position in the production of many of the key products manufactured with TPEs, like footwear, motor vehicles, houseware, appliances, sporting goods, hand and power tools and industrial machinery. Currently, a large portion of TPE demand in China is devoted to the country's massive footwear industry. With demand exceeding one mln tons in 2011, a utomotive sector will remain world's largest TPE market. The sustained gains will be attributable to the development of new products for exterior (body seals) and interior (door panels and instrument skins) applications at the expense of EPDM and PVC. Though all major generic types of TPEs are gaining new applications in the automobiles, TPOs will remain the largest volume segment. The smaller consumer and sporting goods sector will remain the fastest growing market for TPEs through 2011. Gains will primarily be attributed to expanding uses in sporting goods and personal care goods, where TPEs will benefit from the continued displacement of traditional materials such as thermoset rubber and thermoplastics (particularly PVC). In these applications, TPEs are primarily valued for their durability, easy processing, colourability and weather resistance. The smaller medical products and consumer and sporting goods sectors will remain the fastest growing markets for TPEs through 2011. Gains will be derived mainly from the development of newer products with better ergonomic or soft touch features, improved UV-resistance and temperature sensitivity, greater transparency and translucency and other beneficial features. Moreover, overall global demand for medical and consumer and sporting good products is forecast to register healthy gains through 2011.