EPDM (Ethylene Propylene Diene Monomer) is an elastomer. It denotes a terpolymer based on three monomers namely ethylene, propylene and a non-conjugated diene. EPDM finds use as elastomer in several growth oriented application sectors such as automobile, building and construction, wires and cables, etc.

Supply scenario – Period 2012

Global installed capacity       1,266,000 metric tonnes

Capacity utilization              90% on an average

Global production                Around 1,394,000 metric tonnes

Future installed capacity and production estimates (In metric tonnes)

Period	**Installed capacity	*Production
2012	1,266,000	1,139,400
2015	1,401,000	1,260,900
2020	1,521,000	1,368,900

*Considering capacity utilization of 90%

**Considering all the announced projects would be commissioned by 2016

Demand drivers and growth

EPDM is the most used non-tyre synthetic rubber and is recording steady demand growth amongst the synthetic rubbers. The growth in demand for EPDM will be driven by the performance of the application sectors, of which automobile sector constitutes the largest segment. The application sectors are growth oriented.

Overall AAGR through 2020  : 4.6%

Global demand for EPDM – Period 2012

Global demand                                            1.14 million tonnes per annum

Pattern of application sectorwise demand

Projected demand supply scenario – Period 2020

(in million metric tonnes per annum)

Period	**Installed capacity	*Production	Demand	Gap in supply
2012	1.266	1.14	1.14	Matches the demand
2015	1.401	1.26	1.37	0.11
2020	1.521	1.37	1.72	0.35

Global Installed Capacity

Period 2012

Global Installed capacity 1.266 million metric tonnes

Pattern of region wise installed capacity

The United States is the biggest EPDM producer.  Japan and Korea come next.

Pattern of company wise installed capacity

Global production – Period 2012

Global production            Around 1.14 million metric tonnes

EPDM Manufacturers

Company	Company	Location	Capacity (Metric Tonnes)
Europe	Lanxess (erstwhile DSM Elastomers)	Geleen, Netherlands	160,000
	Lanxess	Marl, Germany	65,000
	Nizhnekamsk–neftechim	Nizhnekamsk, Russia	30,000
	Polimeri Europa	Ferrara, Italy	85,000
	ExxonMobil Chemical	Notre Dame de Gravenchon, France	85,000
Americas	Lion Copolymer	Geismar, Louisiana, US	91,000
	Lanxess (erstwhile DSM Elastomers)	Triunfo, Brazil	40,000
	Dow Elastomers	Plaquemine, Louisiana, Texas, US	90,000
	ExxonMobil Chemical	Baton Rouge, Louisiana, US	180,000
	Lanxess	Orange, Texas, US	55,000
Asia	Japan Synthetic Rubber	Kashima, Yokkaichi, Japan	25,000
	Kumho Polychem	Yeosu Petrochemistry Complex, South Korea	95,000
	SK Energy	South Korea	30,000
	Mitsui Petrochemical	Chiba, Japan	120,000
	PetroChina	Jilin, China	75,000
	Sumitomo Chemical	Chiba, Japan	40,000
			385,000
World			1,266,000

Demand supply scenario

Globally, EPDM is likely to be in tight supply situation, in view of its steady growth in demand and new capacity creation not catching up with the growth in the demand. In Asia Pacific region, particularly in countries like India and China, the demand growth is likely to be high in the region of 8.5% per annum. Automotive industry drives the demand for EPDM, followed by wiring and cable insulation, moulded products and rubber hoses for industry. Such user industries have high level of relevance to the industrial and economic growth pattern in all regions.

Considering the likely growth in demand in diversified application sectors in all regions, there is strong case for capacity creation for EPDM.

EPDM Price Analysis

EPDM price in different regions is given below:

Region	CIF price USD per tonne	FOB price
USA	3268	2688
Europe	2964	3119
Asia	3325	3377

EPDM Regional price – Period: 2006 to 2011

Recommendation

Technology for the EPDM project has to be sourced from well established producer

It is necessary to have firm tie up arrangement for the long term supply of feed stock, namely ethylene and propylene.

It is preferable to locate the project close to the ethylene cracker.

The global market can be targeted for the product outlet

Raw material availability has to be tied up with the supplier on long term contract.

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