Westford, USA, Nov. 17, 2022 (GLOBE NEWSWIRE) -- Global demand for rubber will stabilize in the medium to long term as the macroeconomic environment improves, according to a report from SkyQuest. The forecast predicts that global natural rubber market demand will grow at a CAGR of over 1.5%, reaching 18 million metric tons by 2028. However, this growth rate is lower than what was seen from 2010-2018 due to technological advancements in alternative materials and substitution of certain grades of rubber with others.
Growth in the global rubber market is being held back by price volatility and substitution of Rubber-2 (natural) for some grades of synthetic rubber. However, over time we are seeing renewed interest in synthetic rubbers as usage grows for greasing elements in machinery and car parts. Demand for natural rubber is likely to remain strong due to its many applications such as roofing membranes and automotive gaskets. Alternative materials such as silicone nitrile are also finding favor because they have better characteristics than synthetic rubbers when it comes to weather resistance and temperature tolerance.
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Key factors boosting the growth of the synthetic rubber market include increasing use in automotive and consumer product applications, as well as increasing R&D investments in new technologies such as biopolymers. The increase in renewable energy usage is also expected to drive demand for synthetic rubber products that are environmentally friendly.
Challenges
Tire manufacturers are facing a number of challenges in the rubber market such as a lack of raw materials and rising costs. These challenges are likely to impact the tire sector globally, and accordingly, companies that operate in this market should be prepared to face them. A lack of raw materials is a major challenge for tire makers as it has driven up prices for rubber stock.
Global production in the rubber market surpassed 27.4 million metric tons in 2021. However, increasing demand from the automotive and construction industries will put pressure on the availability of rubber supplies. This situation is likely to continue until at least 2027 due to increased investment in synthetic alternatives and expansions in natural resources like Brazil and Indonesia. Thailand produces around 35% of the global natural rubber. On the other hand, China is the largest producer of synthetic rubber.
Cheaper synthetic substitutes have emerged in recent years as an option for tiremakers looking for ways to reduce costs. However, these products are not always reliable and may eventually wear out more quickly than natural rubber products. Additionally, artificial rubbers often require different manufacturing processes which can add cost and time to the overall process.
Consequently, OEMs in the global rubber market are increasingly looking towards natural rubbers as an option for next-generation tires due to their durability and lower emissions levels. Growing labor costs are also a major challenge for tire companies. According to Forrester Research's Global Manufacturing Competitiveness Report (GMC), labor costs have risen faster than product cost or non-labor input prices over the past five years in most countries studied (including China).
Synthetic Rubber to Generate $45 billion Revenue of Global Rubber Market
The synthetic rubber market is expected to generate over $45 billion in revenue by 2028. In fact, the market is anticipated to grow at a CAGR of over 6% during the forecast period. The key drivers for this growth include increasing demand from the automotive and construction industries, as well as the growing demand for rubber products from downstream sectors such as adhesive and sealants. The growth in the production of synthetic rubbers is attributed to the increasing demand for fuel-efficient and environmentally friendly vehicles.
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While natural rubber possesses certain advantages such as high elasticity, low coefficient of friction and fatigue resistance, it has several drawbacks such as shortages and environmental concerns. Over the past few years, sensors and controllers in the rubber market for automobiles have been made with plastics that contain recycled materials such as polypropylene and acrylics (synthetic rubbers). This has led to an increase in demand for these types of plastics, which are composed mostly of water and oil. As a result, the production of synthetic rubbers is set to grow at a CAGR of 6% during 2022-2028.
Some of the most prominent players in the synthetic rubber market include BASF SE (Germany), ChemChina Co Ltd (China), DowDuPont Inc (U.S.), Exxon Mobil Corporation (U.S.), Genuine Corp (Japan), Interscience Associates LLC (U.S.), LG Chem Ltd (South Korea), Mitsubishi Tanabe Plastics Group, Ltd. (Japan), Nexans NV (Belgium/France), and PTT Shinawatra Plastics Industry.
Despite this growth, there are several challenges that the industry is facing. These include environmental concerns related to the manufacture of polymers from oil, increasing raw material costs, and higher labor costs. In addition, new materials such as carbon fiber composites and nanocomposites are competing with synthetic rubbers in some markets. SkyQuest believes that these challenges can be overcome through innovation and strong execution.
Thailand, Indonesia, China, and South Korea Produces More than 43% Revenue of Rubber Market
Global rubber production is pegged at 27.3 million tons. Out of which 35% of the natural rubber is produced by Thailand, which is followed by Indonesia. On other hand, South Korea accounts for over 12% of the natural rubber production. Our study suggests that more than 90% of the rubber produced in Thailand and Indonesia is exported to various countries around the globe.
Thailand is the world’s largest producer of natural rubber in the global rubber market with an output of 4.3 million tons in 2021. Indonesia is third with an output of 11,000 metric tons while China ranks fourth with an output of 3.09 million tons. The main production areas for Thailand are Central and Southern Thailand while for Indonesia it is mainly Sulawesi and Java. For China it is mainly Hebei province while for South Korea it is mainly Jeolla province. The main production areas for each country vary depending on climate and soil conditions.
In China, crude rubber oil is extracted from seethed raw materials which include latex and other impurities left over after refining crude oil products like gasoline or diesel fuel. China is the largest producer in the global synthetic rubber market, and manufactures around two-thirds of the world’s rubber products. In 2021, the country produced 6.3 million tons of synthetic rubber and its production capacity is increasing at a CAGR of over 9.7%. The strong demand for synthetic rubber reflects increasing concerns over the reliability and sustainability of natural rubber resources.
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Top Players in Global Rubber Market
- ARLANXEO (Netherlands)
- Kumho Petrochemical Co., Ltd. (South Korea)
- PetroChina (China)
- TSRC Corporation (Taiwan)
- LG Chem (South Korea)
- Versalis (Italy)
- Dow Chemicals (US)
- Von Bundit (Thailand)
- Sri Trang Agro-Industry (Thailand)
- Southland Holding Lonza (Thailand)
- Vietnam Rubber Group (Vietnam)
- Tradewinds Plantation Berhad (Malaysia)
- Tong Thai Rubber Group (Thailand)
- Ravasco (India)
- Halcyon Agri (Singapore)
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