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Rubber Compounds RUBBER COMPOUNDS A MARKET OPPORTUNITY STUDY September 2011 By: Robert Brentin and Phil Sarnacke OMNI TECH INTERNATIONAL, LTD. 2715 Ashman Street Midland, MI 48640 Phone: 989.631.3377 TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................... 1 STUDY OBJECTIVES .......................................................................................................................... 3 THE RUBBER MARKET ..................................................................................................................... 4 PRICE TRENDS ................................................................................................................................. 9 RUBBER PRODUCTS Natural Rubber ....................................................................................................................... 12 Polybutadiene ....................................................................................................................... 16 Ethylene Propylene Diene Monomer .................................................................................... 18 Styrene Butadiene Rubber ..................................................................................................... 21 Butyl Rubber .......................................................................................................................... 23 Nitrile Butadiene Rubber ....................................................................................................... 24 Chloroprene Rubber .............................................................................................................. 25 RUBBER COMPOUNDS AND MATERIALS Rubber Compounding ......................................................................................................... 28 Process Aids and Plasticizers ............................................................................................... 29 Vulcanized Vegetable Oil .................................................................................................... 32 Epoxidized Vegetable Oil .................................................................................................... 34 Carbon Black ....................................................................................................................... 34 Carbonate, Clay, Silica and Other Mineral Fillers ............................................................... 36 RUBBER AND ELASTOMER APPLICATIONS Tires ..................................................................................................................................... 39 Footwear ............................................................................................................................. 44 Hose and Belting ................................................................................................................. 45 Rubber-Covered Rolls ......................................................................................................... 47 Roofing and Geo Membranes ............................................................................................. 49 Wire and Cable Insulation ................................................................................................... 50 OPPORTUNITIES FOR SOY PRODUCTS IN RUBBER COMPOUNDS United Soybean Board Sponsored Projects ........................................................................ 51 Research and Development - Process Oil ........................................................................... 52 Research and Development - Fillers ................................................................................... 54 Vulcanized Soybean Oil ....................................................................................................... 57 Application Development ................................................................................................... 59 ISSUE ANALYSIS High Aromatic Hydrocarbons .............................................................................................. 61 Sustainability ....................................................................................................................... 62 COMMERCIALIZATION NEXT STEPS Value Chain for Soy in Rubber ............................................................................................ 64 Product and Market Development Strategies for Soy Products in Rubber Compounds ... 65 RESOURCES Patents and Patent Applications ......................................................................................... 68 Table of Common Synthetic Rubbers ................................................................................. 75 Rubber Industry Terminology ............................................................................................. 76 North American Industry Classification System, Rubber Product Manufacturing ............. 82 Standard Classification System for Rubber Products in Automotive Applications ............ 86 Product and Market Development Strategy ....................................................................... 88 FIGURES 1. World Consumption of Rubber by Region ................................................................................ 4 2. Statistical Summary of World Rubber Situation ....................................................................... 5 3. Rubber Price and Related Indicators ........................................................................................ 6 4. The World Market for Synthetic Rubber is Growing ................................................................ 6 5. Price Index: 2001 – 2011 (Energy and Soybean Products) ....................................................... 9 6. Price Index: 2001 – 2011 (Natural Oils) .................................................................................... 9 7. Small-size Truck Tires .............................................................................................................. 13 8. Worldwide Production of NR .................................................................................................. 14 9. Natural Rubber Price ............................................................................................................... 15 10. United States EP Rubber Capacity .......................................................................................... 18 11. ASTM Classification of Various Types of Petroleum Oils for Rubber Compounding .............. 30 12. Starting Point Compounds ...................................................................................................... 31 13. Unit Sales of Tires (United States) .......................................................................................... 39 14. 2010 United States Replacement Tire Sales ........................................................................... 41 15. Tire Units Shipped ................................................................................................................... 42 16. North American Tire Plant Capacities ..................................................................................... 43 17. North American Light Vehicles ............................................................................................... 43 18. United States Footwear Retail Market Forecast 2008 – 2013................................................ 44 19. Recent, Current and Proposed USB Soy in Rubber and Elastomers Projects ......................... 52 20. Fatty Acid Profiles of Sustainable Oils .................................................................................... 53 21. Recommended Usage Levels for Factice by Rubber Type and Process .................................. 58 22. Commercial Grades of Vulcanized Soybean Oil ...................................................................... 58 23. Starting Point Compounds from The Vanderbilt Rubber Handbook ...................................... 59 24. Value Chain for Soy in Rubber ................................................................................................ 64 EXECUTIVE SUMMARY There is significant potential for soy products in the rubber and synthetic elastomer industry as plasticizer oil and filler alternatives for petroleum-based process aids and additives. There are several factors supporting this emerging opportunity, Product technology • Soybean products already have some established uses in the rubber and plastics industry as a plasticizer, acid scavenger, and process aid. • Published research and patent applications have shown that soy products can function as process aids / plasticizers and as a reinforcing filler in a range of rubber compounds. Market • Rubber manufacturing and fabrication is a large global industry. The International Rubber Study Group forecasts that total rubber consumption should increase 4.5% this year, totaling 25.7 million metric tons, and that in 2012 consumption will increase 7.5% to 27.6 mmt. • Rubber is a formulated product containing elastomeric polymers, fillers, processing aids, cure systems, and a variety of chemical additives. Soy products, as a component in a formulation, need to demonstrate functional performance at favorable economics, rather than validate their performance as a stand-alone, new product. • The supply of natural rubber has decreased due to the reduction in land use dedicated to growing rubber trees. Vulcanized vegetable oils, notably soybean, have the potential
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