Ethylene Propylene Diene Monomer (EPDM) Market to Reach ~ US$ 6.2 Bn by 2027

Ethylene Propylene Diene Monomer (EPDM) Market: A Shift towards Bio-based Materials to Create Promising Opportunities

The use of synthetic rubber across a number of applications is a common practice, wherein, ethylene propylene diene monomer (EPDM) has captured significant attention of consumers. The rising dominance of synthetic rubbers in the global rubber market is closely attributed to several interconnected factors, including the highly volatile prices of natural rubber and regional production polarization. These aspects have compelled rubber consumers to make a paradigm shift from natural rubber to synthetic rubber.

Substantial mechanical strength and application over wide temperature changes have positioned ethylene propylene diene monomer as the ideal rubber for use across a number of end-use segments. With very inert chemical properties that provide exceptional weathering resistance and considerable performance, EPDM continues to gain popularity, thereby favoring the growth of the ethylene propylene diene monomer market.

Continual growth projected by end-use industries, including the automotive and building & construction sectors, has propelled the requirements for EPDM. Transparency Market Research (TMR) recently published an extensive report on the ethylene propylene diene monomer market, with a positive overview of the market. The study unveils the key elements driving growth, while elaborating the developments made by EPDM market competitors.

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Ethylene Propylene Diene Monomer Market: Tracing the Timeline of the Industry’s Progress

The increasing utilization of bicycles, their pneumatic tires in particular, commenced in the 1890s. This created an increased demand for rubber. In 1909, a team led by Fritz Hofmann, functioning at the Bayer laboratory in Elberfeld-Germany, prospered in polymerizing isoprene – the first synthetic rubber. Moreover, by 1925, the cost of natural rubber had hiked considerably, incentivizing companies to explore methods of producing synthetic rubber. EPDM and hypalon synthetic rubbers were first introduced in the U.S. around the 1960s.

Continual transformations in application sectors have created the need for effective and improved materials that could withstand temperature changes and offer considerable efficiency. Synthetic rubbers such as ethylene propylene diene monomer, owing to its advantages, including cost-effectiveness and ability to reduce energy consumption, have both, specialty and general-purpose applications. The ethylene propylene diene monomer market is expected to generate a revenue of ~ US$ 3.9 Bn in 2019 and is expected to grow at a CAGR of ~ 6% throughout the period of forecast.

Key Trends Influencing the Ethylene Propylene Diene Monomer Market

Rapid Expansion of Automotive Sector Creating Demand

The automotive sector has witnessed significant growth over the past couple of years, with a constant rise in the sales volumes and increasing number of vehicle owners. The automotive industry is one of the largest end users of ethylene propylene diene monomer. With excellent resistance to ozone or UV rays, and brake liquids with glycol, ethylene propylene diene monomer is an ideal choice in the automotive sector.

Growing Application of Thermoplastic Vulcanizates (TPV)

When the thermoplastic elastomers industry was far less developed in early 1980, than it is currently, thermoplastic vulcanizates (TPVs) presented a new crease. These materials directly aimed at cross-linked rubber materials by the amalgamation of a cross-linked ethylene propylene diene monomer into a polypropylene structured matrix. The growing applicability of TPVs across the automotive sector, on account of its attributes such as high resistance to weather and chemical conditions, and superior ozone and UV resistance, is consequently creating higher demand for EPDM.

Although key industry trends are shaping the growth of the ethylene propylene diene monomer market, certain factors are likely to hamper its progress. EPDM shows poor compatibility with most oils, kerosene, gasoline, aromatic and aliphatic hydrocarbons, and halogenated solvent concentrated acids. Moreover, the inert nature of the material also creates difficulties in achieving success with the material during the process of in-mold vulcanized bonding to a substrate, creating further limitations.

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Strategies Breaking Ground for EPDM Manufacturers  

Expanding Production Capacity

Companies operating in the ethylene propylene diene monomer market are growing their global presence by installing production facilities in developing regions to capture untapped markets. The latest trend in the EPDM market is to increase the production of bio-based EPDM, particularly in Asia. For instance, a joint venture between Saudi Aramco and Sumitomo Chemical-Petro Rabigh commenced the production of EPDM grades at its new plant in Saudi Arabia.

Shifting Focus Towards Bio-based EPDM

Sustainability continues to influence businesses, making it significant for companies to discover bio-based variants. Similar approaches are witnessed across the EPDM industry in order to attain reduced carbon footprint. Moreover, in order to differentiate themselves from competitors, manufacturers are focusing on the production of bio-based EPDM with enhanced properties, including temperature flexibility, weather changes, high tensile strength, adhesion to metals, and solvent and oil resistance. Conventional EPDM rubbers are produced from petroleum products. Hence, manufacturers are likely to face internal competition from environment-friendly bio-based EPDM in the coming years.

Capturing Opportunities in Asia Pacific

The Asia Pacific market for ethylene propylene diene monomer is not just the leading region, but is also expected to remain a high-growth market over the forecast period. Robust growth in the automotive sector coupled with a multi-fold expansion of the building and construction industry, particularly in India and China, is likely to create major opportunities. Production and commercialization of bio-based EPDM is expected to further drive the Asia Pacific EPDM market during the forecast period. Such factors have led companies to consider business expansion in Asia. In an attempt to attain this stance, companies are considering strategies such as acquisitions and manufacturing capacity expansion.

Scrutinizing the Competitive Background

In 2018, Johns Manville (JM), an industry-leading manufacturer of commercial roofing products, announced the availability of a new reinforced EPDM membrane sheet, incorporating tape-to-tape technology. This next-generation offering, which is designed to work on a single ply waterproofing membrane, is tested and verified to speed up installation by up to four fold, resulting in lower labor costs.

In 2018, Versalis (Eni) opened a new EPDM rubber production plant in Ferrara, aiming to strengthen supply to the automotive industry. This investment would strengthen Versalis’ presence in the geography, further facilitated by functioning closely with local institutions.

The EPDM market is consolidated in nature, wherein, the leading six manufacturers held ~ 70% share in 2018. Key players are firming up their distribution channels to expand market share. Mergers and acquisitions are likely to alter the market shares of companies during the forecast period, as they continue to concentrate on business proliferation. The number of local players expanding into the global ethylene propylene diene monomer market is expected to intensify competition and affect the global dynamics of the EPDM market. The level of consolidation in the EPDM industry is expected to reduce during the forecast period, on account of the lucrativeness of the market and broadened scope of EPDM applications across various end-user industries. Companies are considering R&D investments to further bolster their business and get closer to meeting consumer needs.

Analysts’ Market Perception

Applicable in electrical cable joints and roofing membranes, as it does not pollute runoff rainwater, EPDM enhances the efficiency of rainwater harvesting. Similarly, its aesthetic finish continues to add value to automobiles. Owing to the aforementioned factors, TMR’s analysts have a positive perspective regarding the ethylene propylene diene monomer market. Based on historical trends and present automotive industry dynamics, developing regions such as Asia Pacific and Latin America are likely to contribute significantly to the expansion of the automotive industry, as such, driving the demand for EPDM at a significant rate in these regions. Moreover, although EPDM demand is high across Asian economies, most of the Asia’s EPDM demand is met through imports. New entrants in the EPDM market could consider this as an opportunity to set up new production facilities across developing countries in order to bridge the gap between demand and supply.