Natural Rubber demand to grow steadily, says Beroe

RALEIGH, N.C., Jan. 25, 2023 /PRNewswire/ -- Natural rubber is an essential commodity used in tires, latex items, and other products. In 2021, the Global Natural Rubber supply was 13.8 MMT, while global demand was 13.6 MMT. However, market research and information sourced from reliable sources suggest that the global demand CAGR is 3% for the period 2021–2025. It is also predicted that by 2025, Natural Rubber production is estimated to reach around 15.5 MMT.

The Natural Rubber market saw a dearth of strong growth catalysts from 2019 to H1 2020, with auto and tire sales declining. Due to difficulty in important downstream vehicle and tire operations, a decline in oil prices, and buying momentum due to COVID-19, the US-China trade war, and other macroeconomic variables, demand fell drastically in 2020.

Due to the rise in yielding regions and the average yield in top-producing countries such as Thailand, Malaysia, and India, Asia remains the primary provider of Natural Rubber. Emerging Natural Rubber producers like Ivory Coast, Cambodia, and others will likely face future competition.

Historically, the Natural Rubber market saw a downward trend from 2014 to early 2016 owing to a lack of downstream demand from major users like China, the United States, and others. The market experienced a shortage of strong growth catalysts from 2018 to H1 2019, with auto and tire sales declining. Furthermore, the repercussions of US-China trade, particularly in rubber end goods, as well as muted downstream attitudes resulting from COVID-19 and a drop in crude oil prices, have hindered market growth in 2021.

Latex grades in gloves, condoms and other products saw increased demand attitudes, particularly during the epidemic, giving Malaysia a recovery advantage. The predicted rebound in the automobile and tire sectors, the medical and gloves sector, and durables would support a positive view from 2022 to 2025. The Natural Rubber growth rate in automobile manufacturing (7-8 percent) is predicted to increase, particularly for passenger automobiles. Tires and related items are the main demand drivers in the Indonesian Natural Rubber market.

Due to fewer downstream uses, latex products are predicted to grow at a moderate 4-5 percent rate. Similarly, In Malaysia, which is the market leader in latex products, 5-7 percent growth has supported the production of gloves, condoms, and so on.

Thus, Asia will remain the primary provider of Natural Rubber because of increases in yielding area and average yield in top-producing countries such as Thailand, Indonesia, Malaysia, and India. Non-Asian countries, such as Ivory Coast and Liberia, have emerged as viable alternative sourcing destinations. Emerging economies like China and India are driving total tire demand and tire manufacturing growth. The tire industry is relocating to countries with low-cost production.

Due to their excellent R&D, adequate supply, and quality, latex products are dominating in the Southeast Asian market, such as Malaysia and Thailand. Malaysian latex demand is quite strong; despite being a producer, the region still imports from Thailand. Compared to other significant end uses, different Natural Rubber categories have a modest market share in demand and growth. Technology, economies of scale, efficient operational expenses, and other factors influence these sectors.

In Addition, Collection centers that can ensure product quality, quantity, and consistency would be more beneficial to a buyer. Buyers choose warehouse facilities with proper temperature and humidity conditions so that existing stockpiles can manage supply abnormalities.

For the period and location of procurement, efficient sourcing would be from October to February, primarily in Thailand, due to enough supply, lesser price fluctuation, and quality. Prices have risen significantly; as a result, purchasers can exercise pre-booking options with suppliers ahead of the off-season when prices are at their lowest

Because supply limits are likely to increase throughout most regions after 2020, consumers prefer to purchase or pre-book significant volumes of rubber before experiencing increased prices and limited supplies.

About Beroe
Beroe is a global SaaS-based procurement intelligence and analytics provider. We deliver intelligence, data, and insights that enable companies to make smarter sourcing decisions – leading to lower costs, reduced risk, and greater profits. Beroe has been a trusted intelligence source for more than 15 years and partners with 10,000 companies worldwide, including 400 Fortune 500 companies.

Learn more about Beroe - https://www.beroeinc.com/
Media Contact – Debobrata Hembram (debobrata.hembram@beroe-inc.com)

Logo - https://mma.prnewswire.com/media/777512/Beroe_Logo.jpg