rubber process oils, rpo market

Kline presented at the 10th China International Rubber Oil Summit in Ningbo, China

I was invited to present at the 10th China International Rubber Oil Summit in Ningbo, China about the “Trends and Opportunities on the Global Rubber Process Oil Market” (全球橡胶加工油市场趋势和机遇). The conference was organized by ENMORE on July 11-12, 2019.

The global rubber consumption is expected to slow down in the next five to 10 years due to slower tire demand. Since tires are the major consumer of rubber and rubber process oil (RPO), the demand for RPO is expected to grow slower during this period. Furthermore, there is an emerging trend to use less RPO to produce lighter tires. However, demand for other rubber goods, such as shoes, toys, tubes, hoses, and belts, among others, is expected to grow and drive growth in the RPO market, which is estimated at close to 3.3 million tons globally in 2018.

In terms of product segments, aromatics comprising DAE, TDAE, RAE, TRAE, and MES are the largest product segment, accounting for close to 52% of total demand. Aromatics are followed by naphthenic and paraffinic RPOs. Since 2013, aromatics have lost about 5% market share as tire and other rubber goods manufacturers look for alternatives mainly due to a ban on DAE in the European Union.

Other regions, such as Asia, are also moving to “greener oil” with less polycyclic aromatic hydrocarbon (PAH). TDAE is the best available alternative for DAE, but it is expensive and is dedicated to passenger car tires. RAE, with poorer performance, is preferred in truck tires and conveyor belts. Consequently, rubber goods manufacturers are increasingly adopting paraffinic and naphthenic RPOs. Naphthenic RPOs are a good substitute for TDAE and RAE, as they offer solid performance and availability. Naphthenic suppliers have included a 5%-6% bio content to formulations to improve polarity.

The United States and China are the largest RPO markets in the world, followed by India, Japan, South Korea, and Germany. The 15 countries studied in the report account for more than 75% of global RPO demand.

Local suppliers dominate in most markets with an exception of the single EU market and some Asian countries. However, even in these markets, local players have a significant presence.

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