Prices of Thermoplastic Elastomer (TPE) have witnessed an appreciation of approximately 1% during the latter half of April 2024 across the Belgian market. The prime reasons attributed to the increments in the prices of TPE is attributed to the inflated production costs on account of inflation in the prices of feedstock Styrene which surged by more than 11%, thereby increasing production cost.

The high demand from the Polystyrene industries on the back of the well performing automotive and electronics sector which eventually led to a surge in the prices of Styrene, consequently resulting in higher production costs for TPE.

Although the automotive sector has been performing well, the transition of consumer preference to Hybrid Vehicles (HEVs) has continued to have detrimental impact on the demand side of TPE across the European market. This is clearly evidenced by the stable market situation of TPE across Belgium except for the increments in the prices observed in the last week of April, that is the week ending April 26, 2024. Diesel and Petrol registrations totaled 1,377,541 units last month a 2.7% decrease versus March 2023, clearly impacting the demand for TPE which finds its prime application in the conventional combustion automotives. However, In Q1, sales of plug-in hybrid electric vehicles (PHEVS) increased by 10% to 248,964, outpacing the growth of electric vehicles with further appreciations expected at the end of April 2024.

The only deviation was observed across Germany where conventional combustion automotives continued to dominate the market share. Shifting the focus towards ICE vehicles, both gasoline and diesel saw increases from their March 2024 totals; the former had a 16.9% increase to 81,724 units. Gasoline automotives fell to a 38.3% share despite this increase. Diesel ICE automotives witnessed a similar outcome, increasing 4.3% because of 40,936 deliveries. Moreover, the ICE automotives are further expected to continue to increase towards the end of April 2024 due to lack of charging stations, which in turn is expected to continue to provide some support to the Belgian TPE market.

Overall prices of TPE are expected to increase as inflated prices of Styrene are expected to continue to have their effect on the production costs. Demand conditions for TPE are also expected to remain favorable from the overseas market, particularly from the US market, where BEV and PHEV market share of the US automotive industry have plateaued. This is clearly evidenced by major US automotive manufacturers announcing either price reductions or scaling back production.