European Custom Compounding Survey 2023 - Mixed signals

London - European custom compounders presented a mixed report on the performance of their markets as pressure on costs, supply-chains and markets overtook rebound from the Covid pandemic as the dominant theme.

Nevertheless, combined sales among the top 10 companies – that provided revenue figures for the ERJ Custom Compounding Survey both this year and last – increased by 19.1% year-on-year to Ä2537.2 million.

There was a lesser but still considerable year-on-year increase of 13.8% when figures from Hexpol – by far the largest player – were excluded from the 2022 sales data.

The growth in sales matches the performance recorded a year ago, when all respondents reported an increase of around 19%, as markets rebounded from impact of the pandemic.

Despite the positive sales trend, respondents were somewhat downbeat in their ratings of current prospects for the elastomer compounds market in terms of geographic region, elastomer-type and end-use application.

Respondents to the annual ERJ survey – carried out between April and June – are asked to rate growth prospects by country/region, material-type and end-product markets, between 5 (high growth) and 1 (decline).

This year, the overall business-optimism rating by region averaged 3.08, down from 3.23 a year ago: Benelux, Czech Republic, Italy and the UK registering particularly significant declines.

Asked about demand for specific rubber materials, the average rating fell well short of last year’s level – to 2.91 from 3.51 in the 2022 survey.  Here, a marked improvement in demand for natural rubber-based compounds was more than offset by ratings for other elastomers, not least EPDM, nitrile rubber, HNBR, fluoroelastomers and silicones.

In terms of end-product markets, the average business sentiment rating came in quite similar to the prior-year level as slight gains in sectors such as chemicals, retreads and recyclate, were offset by minor declines elsewhere.

Read the full report in the July/August edition of European Rubber Journal magazine.