South Korea Thermoplastic Elastomer Market Trends

Market Driver – Growing Demand for Lightweight Materials

The growing demand for lightweight materials across various industries such as automotive, consumer goods and construction are a major factor driving the growth of South Korea's thermoplastic elastomer market. Thermoplastic elastomers are becoming increasingly popular as a replacement for conventional materials like metals and thermoset rubber due to their lightweight yet durable nature.

South Korean automobile manufacturers have been at the forefront of adopting thermoplastic elastomers to produce lighter and more fuel-efficient vehicles. According to the International Organization of Motor Vehicle Manufacturers, South Korea's vehicle production increased by 5.2% to 4.1 million units in 2021 compared to the previous year. This upward trend is expected to continue on the back of steady economic growth and demand for personal mobility post-pandemic. The focus on reducing vehicle weight and meeting stringent emission regulations has pushed automakers to use more thermoplastic elastomers in applications like bumpers, door seals and injection-molded interior trims.

The construction industry has also been a major driver of thermoplastic elastomer demand given the push for green and sustainable buildings.

Market Driver – Technological Advancements

Technological advancements are significantly contributing to the growth of South Korea's thermoplastic elastomer market. Thermoplastic elastomers find extensive applications in various industries like automotive, consumer goods, medical, and construction due to their beneficial properties. South Korea being a technologically advanced country is constantly developing advanced materials to boost industrial production through Fourth Industrial Revolution initiatives.

The development of intelligent factories using robotics, artificial intelligence, 3D printing etc. has increased the demand for high-performance yet cost-effective materials like thermoplastic elastomers. They are increasingly being used to manufacture lightweight and durable components for robots, drones, autonomous vehicles and other smart machines and devices. For example, SK Telecom, a leading Korean telecom company has deployed AGVs or automated guided vehicles based on thermoplastic polymer blends to facilitate efficient material transport in its 5G equipment factories (Source: SK Telecom). This signifies how thermoplastic elastomers can support Korea's Industry 4.0 goals by facilitating automation.

The healthcare sector is another major growth driver. As per statistics by Korean Statistical Information Service, South Korea's healthcare spending rose by 5.2% year-on-year to KRW 107.3 trillion in 2020, indicating higher investments in medical technologies.

Market Challenge – Volatility in Raw Material Prices

Volatility in raw material prices has emerged as a major constraint for the growth of South Korea's thermoplastic elastomer market in recent years. Thermoplastic elastomers are made from crude oil-based raw materials like ethylene, propylene, and butylene, whose prices fluctuate greatly due to unstable global oil markets. Any sudden spike in crude oil rates leads to an immediate rise in production costs for thermoplastic elastomer producers. With narrow profit margins, it is difficult for the manufacturers to fully pass on these additional costs to the customers, which squeezes their margins.

This cost uncertainty and margin pressure discourage businesses from making long-term investment decisions in expanding thermoplastic elastomer capacities. According to the UNIDO (United Nations Industrial Development Organization), capital expenditure in the Korean petrochemical industry declined by 6.1% in 2021 compared to the previous year, as investors turned cautious amid raw material price volatility. Higher input costs also reduce the affordability of thermoplastic elastomers for various end-use industries like automotive, construction, footwear etc.

Market Opportunity – Increasing Adoption in Healthcare Industry

The healthcare industry in South Korea is growing rapidly due to an aging population, rising healthcare expenditures and focus on innovation. As per data from Korean Statistical Information Service, the healthcare spending as a percentage of GDP increased from 7.2% in 2015 to 7.8% in 2020 showing prioritization of healthcare. This growing industry offers significant opportunity for the thermoplastic elastomer market in the country.

Thermoplastic elastomers are increasingly being used in medical devices and equipment due to their flexible and durable properties along with ease of processing. Properties like biocompatibility make them suitable for applications involving patient contact like catheters, implants, disposable masks etc. The Korean medical devices market which grew at 5.1% annually between 2015-2020 according to Korea Health Industry Development Institute, is expected to further accelerate post covid focusing on preventive healthcare and remote monitoring. This will boost demand for elastomers in devices and connected health technologies. Furthermore, shifting focus on value-based care where outcome matters more than just volume is increasing use of customized medical solutions requiring innovative material approaches.