SBR is a form of synthetic rubber manufactured by the polymerization of butadiene with styrene in the ratio of 3:1. SBR is manufactured by the polymerization of styrene and butadiene using two different processes. SBR is commercially available as solution (S-SBR) or as an emulsion (E-SBR), depending on the element initiating the polymerization. The former involves the use of free radical to initiate the process whereas the latter uses an alkyl lithium compound. Presently, E-SBR is the more widely used SBR but in recent times, S-SBR is being increasingly favored because it offers better properties to tires that are the single largest application for SBR. Tire is the single largest application segment for SBR market. Traditionally, emulsion SBR (E-SBR) was the most favored rubber for tires as it had good physical strength coupled with ease in manufacturing. In addition, tire manufacturers could switch between various grades of E-SBR without having to alter their process. However, over the past few years, countries around the world have started imposing labeling regulations on tire manufacturers. The tires need to be labeled for wet grip, rolling resistance and fuel consumption. Labeling was first introduced in Japan in 2011. The new EU legislation states that from 2012, every new tire sold in Europe shall be labeled for wet grip, fuel efficiency and external rolling noise. U.S. and South Korea are also working on similar regulations. In addition to the EU regulation, Germany has an additional regulation wherein vehicles need to be fitted with winter tires in bad weather; this has heightened sales of winter tires. Apart from the above mentioned countries, India, China and Brazil are expected to impose tire labeling regulations by 2015. These labeling regulations are expected to have a domino effect on the tire market in other countries where these regulations are not being implemented.
There is no alternative to S-SBR in terms of material providing the required levels of fuel efficiency and wet grip. E-SBR with carbon black fillers can provide a maximum tire label of EE on a scale of AA to FF with AA being the best rating for tires. For obtaining any grade better than EE, it is imperative to use S-SBR in combination with PBR and Nd-PBR and silica fillers. In addition, over the next few years, the EU would phase out all tires with grades lesser than BB and this would make the use of S-SBR an absolute necessity. The fluctuating cost of butadiene and styrene are expected to restraint the growth of the market over the forecast period. The global SBR market was 5,122.4 kilo tons in 2013 and is expected to reach 7,730.5 kilo tons by 2020, growing at an estimated CAGR of 6.1% from 2014 to 2020. The market revenue is expected to reach over USD 23 billion at an estimated CAGR of 8.9% from 2014 to 2020. The high growth is primarily due to the increasing demand for S-SBR from the tire industry.
Key application segments covered in the report include tire, footwear, polymer modification, and adhesives. Other segments such as construction, insulation and carpet overlay have also been covered in the report. Tire was the single largest application segment for SBR accounting for over 70% of global consumption in 2013. Primarily, Asia Pacific and Latin America drive the growth in the tire industry. The global tire consumption is expected to grow from 3 billion units in 2012 to over 4 billion units by 2020, owing to positive automobile outlook in manufacturing hubs such as China, India and Brazil. In particular, S-SBR is expected to witness increased demand from the tire industry on account of the new tire labeling regulations and the preference towards the use of ‘Green Tires’. Over 80% of global S-SBR was consumed in the tire industry in 2013 and the share is expected to reach close to 85% over the next seven years. Footwear was the second largest application consuming over 400 kilo tons of SBR in 2013 and is expected to grow at a CAGR of 6.4% from 2014 to 2020. SBR is used in some high performance sports footwear due to its better abrasion resistance and demand is augmented by the increasing disposable income in many developing countries. The other common niche applications of SBR include polymer modification, adhesive and insulation. These segments would witness average growth on account of increased use of S-SBR in tire industry resulting in lesser availability for other applications.
SBR market volume share, by application, 2013
Asia Pacific was the largest regional market for SBR accounting for over 45% of global consumption in 2013. The demand for SBR is expected to grow in the region due to the high demand from downstream industries like tire. China is one of the world’s largest manufacturers of tire and low labor and operating cost in the region have prompted many major tire manufacturers to shift their production facilities to Asia Pacific. The region is expected to have a steady growth in the automobile market due to the increased middle class and economic development of India and China. In addition, countries like Malaysia, Thailand and Indonesia have been steadily growing in terms of disposable income and could soon contribute significantly to the demand of SBR from the region. S-SBR is expected to witness exponential growth in the region due to regulations which are expected to force the use of the rubber in tires. China Rubber Industry Association (CRIA) has launched a plan to develop ‘green tires’ which requires China’s tire manufacturers to fabricate these tires by the end of 2015. India is expected to implement tire labeling regulations by 2015. This is expected to tremendously increase the demand for S-SBR over the next six years. Europe was the second largest consumer of SBR in 2013 consuming over 1,000 kilo tons. The presence of large automobile manufacturing activities in countries such as Germany and Italy are expected to drive the demand in the region. The EU tire labeling regulations are expected to boost the demand for S-SBR in particular over the next 3 years.
The SBR market is fragmented with the top ten players accounting for just over 65% of the market share. This is primarily due to the nature of the product and raw materials. There is high level of integration in the market, especially forward integration of the suppliers of raw materials. The petrochemical companies more than often have presence across the entire value chain from processing of crude oil to the manufacturing of rubber and plastics. Lanxess, CNPC, Sinopec, Asahi Kasei, Bridgestone and Michelin are some of the key players in the market. In light of the increasing importance of S-SBR, the report also includes a regional market share for S-SBR based on volume sales in 2012. Tire manufacturers such as Michelin and Bridgestone are some of the largest manufacturers of S-SBR and have integrated operations in North America and Europe.