ERJ Compounding Survey 2026: Recovery on the horizon for rubber compounders

The European rubber compounding sector shows tentative signs of recovery in 2026 after two consecutive years of decline, according to the latest ERJ Compounding Survey. While overall sales among respondents dipped in 2025, the downward trend appears to be easing, with key markets stabilizing and demand strengthening outside traditional automotive applications. The survey, which includes comparative data from companies that participated in both 2025 and 2026, reveals a 4.3% year-on-year drop in combined sales for respondents to €2,542.5 million in 2025. Excluding Hexpol—the dominant player in the sector—the sales figure stands at €934.4 million, representing a 1.3% decline from the previous year’s survey. The broader downturn was driven by persistent challenges in 2025, including a sluggish automotive market, regulatory uncertainty from new and emerging EU policies, and ongoing supply-chain disruptions. However, respondents reported a notable uptick in non-automotive sectors such as building and construction, wire and cable manufacturing, and medical applications. Demand for technical support services also rose, particularly as companies reformulated compounds to meet evolving EU legislation. Hexpol, the sector’s largest player, attributed a 6% decline in its compounding revenues primarily to currency headwinds, despite a 3% drop in automotive-related demand. The company noted growth in sales to building and construction, wire and cable, and medical segments. Hexpol’s former president and CEO, Klas Dahlberg, acknowledged the group’s resilience in defending its market position in rubber compounding but cautioned that geopolitical instability continues to cast a shadow over near-term prospects. The survey findings are detailed in the July/August 2026 issue of European Rubber Journal.