Bright outlook for global rubber products industry

It is accepted that the future of the rubber industry is tied to the global economy. The consumption of rubber worldwide during the last 10-year period had been between 3.5 and 4.0% annually and was in line with the increase of world GDP. The growth rate for rubber should be more than those for motor vehicle production and motor vehicle registration in the coming years. Nontire applications account for the majority of usage of rubber at 52 to 54 percent of the total, with little change expected. There are and will be numerous applications in various sectors like: Automotive (belts, hoses, gaskets, moldings) Industrial (adhesives, padding, belting, vibration dampening, wire sheathing) Consumer (toys, door moldings) Construction (roofing, sealants, moldings) The outlook is very bright for midrange specialty elastomers, such as ethylenepropylene and nitrile. The US synthetic rubber industry reports more than $4.5 billion in annual shipments, and it exports substantial amounts of these materials. The production and sales of rubber-based products constitute major market opportunities.

World rubber supply

Major producing countries of natural rubber are in the South East Asian region. This is the reason why many of the large tyre companies have vast holdings in South East Asia. Small producers equally play an important role. Synthetic rubber is manufactured in various plants to different specifications around the globe. The division between the two sources of rubber is about 40 percent for natural and 60 percent for synthetic on a global basis and it is not expected to change much in the coming years.

World rubber demand

Demand for natural rubber is always greater than synthetic rubber because it is considered superior to synthetic rubber. As a result of its high quality, natural rubber is the preferred choice when making surgical gloves and drapes, contraceptives, shoe soles, nipples on baby bottles, rubber bands, even carpet backing, in radial tires and in blends with various synthetic elastomers, where its use improves weathering qualities.

The demand for synthetic rubber is aggravated by increasing growth for nontyre products, rising motor vehicle production, and stable pricing. In fact, the demand for non-tyre rubber is expected to outpace world economic growth due to growth in industrialization levels in developing regions of the world. According to

Major producing countries of natural rubber are in the South East Asian region. This is the reason why many of the large tyre companies have vast holdings in South East Asia. Small producers equally play an important role

a recent estimate, world tyre demand is projected to expand 2.6% every year, with OEM tyre demand growth by strong gains in the global motor vehicle industry, and this requires a boost in the replacement needs by a steadily rising global motor vehicle park.

Industrial rubber products demand

Global demand for industrial rubber products is estimated to rise to 4.3% annually through 2013 to $97.8 billion. Market advances in developing areas will further increase due to healthy economic growth, rising personal income levels, ongoing industrialization efforts and also due to growth in manufacturing output and fixed investment expenditures. The industrial equipment market, which includes industrial machinery and equipment, off-road vehicles, will continue to hold the largest share of aggregate demand in 2013.

China, which will surpass the US to become the largest market for industrial rubber products, will account for over one-third of all additional demand generated through 2013. India will also record strong gains, and sales growth is expected to be good as well in a number of lower-volume markets, like Indonesia, Thailand and Malaysia. Advances will continue to be strong in Eastern Europe.

Although there is slight slump, industrial rubber product demand in the US is expected to recover by 2013. Advances will benefit from a turnaround in motor vehicle production and there is ongoing process of recovery in the manufacturing sector. Western Europe and Japan will experience sluggish gains. However, these areas, including Australia and Canada, will continue to be the most intensive users of i ndustrial rubber products because of the advanced industrial and technological nature of their economies.

Mechanical rubber goods comprised the largest rubber product segment in 2009. Suppliers of mechanical rubber products will benefit from continued gains and this is evident due to global motor vehicle production through 2013, as these products are highly represented in this market. Advances will be stronger in the hose and belt segments, reflecting their wide applications diversity and stronger price outlook compared to mechanical goods.

Forecasts

Global rubber consumption is forecast to rise 4.3 percent per year through 2015 to 30.5 million metric tons. Rubber demand will be stimulated by a pickup in tyre output growth as global motor vehicle production accelerates following a relatively weak 2005-2008 period in many developed nations around the world. Because tyres represent by far the largest market for rubber, growth in output of motor vehicles, as well as rising numbers of motor vehicles in use, greatly impacts the amount of rubber consumed globally.

The Asia/pacific region will exhibit the fastest gains in rubber production of any region except the small Africa/mideast market. Gains in China will be especially strong, with the country accounting for over one-fourth of global rubber output gains through 2015 in volume terms. The Asia/pacific region is also an important producer of non-tyre rubber products, and it is expected to account for 80 percent of world market growth in volume terms through 2015.

Asia/pacific region to see best growth

The Asia/pacific region is by far the largest market for rubber, accounting for 60 percent of global rubber demand in 2010/2011. In addition, the region will post the strongest growth in rubber consumption through 2015. The massive Chinese rubber market, which alone accounted for nearly one-third of global rubber demand in 2012/2011, will record the best gains of any major nation through 2015.

The large amount of motorcycle and bicycle production supports strong demand for rubber utilized in non-motor vehicle tyres. China also represents the largest national market for rubber used in motor vehicle tyres. The rubber markets in Western Europe and North America will continue to see gains below the global average, although both regions will rebound somewhat from the sales declines seen during the 2005 to 2011 period. Eastern Europe and Central and South America will also register accelerating, albeit below-average growth through 2015, while gains in the small Africa/mideast market will match the global pace during that period.

Tyre rubber to remain dominant rubber segment

Tyre rubber, which accounted for more than two-thirds of all rubber demand in 2011, is expected to register slower gains than other rubber product sales through 2015 but will remain the larger market segment.

Sales will be fueled by strong increases in production of non-motor vehicle tyres for bicycles, motorcycles and industrial vehicles tyres.

Production of such tyres in certain areas of the world, especially developing nations in the Asia/ Pacific region, will greatly outpace motor vehicle tyre output.

Rubber utilized in non-tyre applications will post stronger advances through 2015, but will remain the smaller segment of t he rubber market. Market gains through 2015 will be bolstered by a strengthened outlook for global manufacturing activity, which will stimulate demand for rubber utilized in industrial applications like sealing and vibration control.

In addition, segment growth will be spurred by the acceleration in motor vehicle production worldwide, which will lead to higher consumption of rubber used in automotive products such as belts, hoses and gaskets.