Special report: High performance rubber takes poll position

10 September 2012 00:00  [Source: ICB]

Major changes are expected to hit the market for automotive rubber over the next 5-10 years as the product mix shifts from commodity products to high performance materials with far superior properties.

The increased use of products such as solution styrene butadiene rubber (S-SBR) and neodynium-based performance butadiene rubber (Nd-PBR) in manufacture is being spearheaded by companies like Germany's LANXESS which are constructing new production capacities.

 

Copyright: Rex Features

S-SBR is mainly used in the tread compound of "Green Tyres", where it helps to reduce rolling resistance and improve grip on wet roads. Nd-PBR is used in the treads and sidewalls of "Green Tyres". It helps reduce rolling resistance and increase fuel efficiency. Nd-PBR is highly resistant to abrasion and plays a significant role in making tires safer and, above all, more durable.

As consumers, regulators, and original equipment manufacturers (OEMs) become more focused on lowering the environmental footprint of transport, attention has turned not just to vehicle design but to tyres as an obvious route to tackling this issue. Studies show that 20-30% of a vehicle's fuel consumption and 24% of road vehicle's CO2 emissions are related to tyres. Studies have shown that "Green Tyres" can reduce fuel consumption by 5-7% and have the quickest cost amortization rate in comparison to other fuel-saving technologies in cars.

New labelling regulation launching in Europe on 1 November 2012 will classify tyres according to their impact on fuel consumption, wet-weather performance and noise. This is likely to quickly raise consumer awareness of tyre performance and make them more discerning when purchasing .

Christoph Kalla, head of marketing and R&D at the Performance Butadiene Rubbers business unit of Germany's LANXESS, says the innovative use of feedstocks to produce high-performance tyres will be one of the most important trends affecting the automotive rubber market over the next five-10 years.

He argues that the era of cheap general-purpose tyres is already drawing to a close because feedstock price inflation has been so great. Jumps in the producer price index for rubber happened for specific reasons, such as the 1970s oil crisis, and they will never go away, he says.

"The cost will not come down and this means that tyres have already become significantly more expensive. When you look at the impact of the total cost of tyres from oil-related feedstocks it is much greater than the additional costs of using high performance materials. With labelling initiatives, which make performance transparent, it is reasonable to assume that high-performance tyres will take over. There is no case for making general-purpose tyres if you can make high-performance ones with an improved performance and returns to the customer."

LANXESS FUEL-SAVING APP
Between 1974 and 2012, changes in tyre design meant car tyre weight declined from 12kg to 8kg, resulting in some fuel savings. As fuel costs and environmental awareness continue to increase, tyre labelling will now allow the consumer to be in a position to relay tyre cost to potential savings. "It has always been difficult to market tyres, especially the performance of tyres. With this fuel-saving app we can show the consumer what they will get in return for their investment," Kalla adds. On 7 September LANXESS officially launched a fuel-saving calculator app.

He believes we are moving from the era from tyre design (mainly from bias to radials) to the era of high-performance materials. "We believe what we now call high performance will become more and more mainstream. There is no such thing as cheap rubber, so there is no such thing as cheap tyres When the input of materials is suddenly five to 10 times more expensive, suddenly the choice of materials you use becomes more important than labour costs."

 
The increasing cost of raw materials such as butadiene, plus high fuel costs and green awareness means that consumers, including OEMs, are starting to understand that the tyre is more than just an item to buy at the lowest cost - performance now matters.

Kalla says: "The whole industry is becoming focused on the total value that is generated. It's a true game changer that is not coming from the tyre labelling - it is just a way to make it more obvious."

Materials manufacturers such as LANXESS now work much more closely with tyre manufacturers to improve performance using new materials and moulding techniques. "Tyre manufacturers have realised they have to go from the cost projectory to the performance trajectory. In the past, it used to take a long time to get feedback from a tyre maker about a new material - it was like fishing in the dark. Nowadays we share recipes, detailed test results, deadlines and milestones."

The high cost of materials means there is also now a real drive to reduce scrap rates and increase retread rates. Brazil already has almost a 100% retread rate. While retreads previously had a bad reputation for quality, new techniques mean tyres can be recycled three to four times without affecting performance.

Kalla estimates that by 2015 the high-performance segment will grow by 77% globally and should make up 50% of all tyres. "The limiting factor is not so much demand but supply. For these tyres to take over you need suitable capacities for high-performance rubbers - that will be the limiting factor. The business model cannot be to use scarce, expensive feedstocks to make cheap tyres."

Labelling for energy efficiency has changed consumer behaviour quickly in other sectors, such as the EU refrigerator market. So the forthcoming EU labelling initiative may also have an immediate impact. As consumers become more discerning in their choice of tyres, new distribution models for tyres, such as online retailing, could also develop. Kalla would not be surprised if Amazon started to offer them. "I believe consumers will pick up quickly on the impact of tyres on fuel consumption. Also, the tyre makers will do a lot of advertising. Non-governmental organisations and car clubs are picking up on it. Once consumers can see the financial and environmental benefits of high-performance tyres, they will be willing to spend that little bit more."

RENEWABLES FOR THE LONG-TERM
While natural rubber is still an essential part of tyre manufacture because of its properties, and forms up to 14% of every unit, the use of new sources of renewable raw materials for tyres is in its infancy. LANXESS is taking its first steps in this direction through the ­production of renewable-based isobutene, a key raw material for rubber manufacture. According to Frost & Sullivan consultant Brian Balmer, there is a huge appetite for bio-based feedstocks such as butadiene from brand owners such as tyre manufacturers and OEMs. "Demand will exceed any amount of production capacity due to come on stream over the next three to four years to 2016." They ­estimate that around 100,000 tonnes/year of new bio-based monomer capacity will be added long term meaning it will take years for it to become a major part of the global feedstock portfolio.

Find out more about LANXESS's fuel-saving app plus a competition to win an iPad


MARKETS BRIAN BALMER & SHREE VIDHYAA KARUNANIDHI

FROST & SULLIVAN: GREEN MOBILITY TRENDS

Our surveys have shown that consumers are not that concerned about environmentally friendly materials being used in vehicle manufacture. But they are keen on sustainable feedstocks for disposable materials such as lubricant oils and tyres where they are aware that there is a disposal issue.

Fuel economy has been a major driver for OEMs. Solution SBR is rapidly replacing emulsion SBR. This trend is strong in Europe, and the US and Asia are catching up.

Butyl rubber capacity is around 1m tonnes globally, LANXESS is increasing bio-based capacity by 75,000 tonnes. So less than 10% of global capacity is based on bio-feedstocks.

If you use solution SBR, you get low rolling resistance. The US expects 5-6% market growth.

Michelin suggested 10% of OEM tyres in 2010 were low rolling resistance and this will increase to 48% by 2020. These will be based on the use of SSBR and silica instead of carbon black.

Asia SSBR capacity is increasing in Thailand, Singapore and Malaysia.

Once the labelling regulations are introduced, we expect those rated lowest will be wiped out completely. South Korea is considering tyre labelling, as is China, and Japan has had a voluntary code.

The car industry wants to be sure that the feedstocks for bio-based feedstocks are not competing with food.


By: Will Beacham
+44 20 8652 3214



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