Market Trends of Liquid Synthetic Rubber Industry
Increasing Demand from the Tire Segment
- Liquid synthetic rubber has wide applications in the manufacturing of tires because it provides enhanced durability and superior performance, along with the adoption of tire labeling regulations.
- The primary product used in the manufacturing of tires is polybutadiene. It is primarily used as a sidewall in tires to improve fatigue caused by continuous flexing during the run. Besides, butadiene has various applications in other automobile parts.
- According to the US Tire Manufacturers Association, tires used in passenger and light trucks have 24% synthetic rubber by volume, and tires used in heavy trucks have 11% synthetic rubber by volume. Furthermore, around 50% of car tires are made of styrene-butadiene rubber, which blends with natural rubber.
- According to the International Tyre and Rubber Association (ITRA), China and the United States are the two largest tire-producing countries in the world. According to data from the General Administration of Customs of the PRC, 3.77 million tons of rubber tires were cumulatively exported from China in the first half of 2022, up 7.2% from the same period last year.
- The US Tire Manufacturers Association also stated that tires used in passenger and light trucks use 24% synthetic rubber (such as SBR), and heavy trucks use 11% synthetic rubber by volume.
- According to the Organisation Internationale Des Constructeurs d'Automobiles (OICA), in 2022, around 85.01 million vehicles were produced across the globe, witnessing a growth rate of 5.99% compared to 80.205 million vehicles in 2021, thereby indicating an increased demand for tires from the automotive industry. In 2022, around 60 million passenger cars were manufactured worldwide, up nearly 7.35% compared to 2021.
- However, in several Asian and European countries, production of tires has been witnessing a gradual yet consistent decline due to reduced demand in both the replacement and original equipment manufacturer (OEM) segments. For instance, the total tire production in India declined by 4% to 169.07 million in FY 2021-2022, compared to the previous year, as per the data released from ATMA.
- Overall, all the factors above have impacted tire production, which is further expected to affect the liquid synthetic rubber market.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to dominate the market for liquid synthetic rubber during the forecast period. In countries like China, India, and Japan, owing to the increasing demand from applications such as tire manufacturing, industrial rubber manufacturing, adhesives, sealants, coatings, and polymer modification.
- China is the largest producer and consumer of automotive vehicles. The China Association of Automobile Manufacturers reports that, compared to the prior year, China's automobile sales increased by about 2.1% in 2022. Compared to the 26.27 million automobiles sold in 2021, around 26.86 million were sold in 2022.
- Liquid synthetic rubber also finds application in the construction industry. According to the National Development and Reform Commission, the Chinese government approved 26 infrastructure projects at an estimated investment of about USD 142 billion, estimated to be completed by the end of 2023 and ongoing. The increase in the construction of tall buildings and hotels is driving the market study.
- India is the fourth-largest consumer of rubber in the world as of 2022. Rubber usage per capita in India is currently 1.2 kg, compared to 3.2 kg globally. India's rubber industry generates approximately INR 12,000 crore (USD 1.44 billion). The tire sector consumes most of India's rubber production, accounting for over half of the country's total output.
- The Indian rubber industry exhibits the co-existence of the rubber production sector and the fast-growing rubber product manufacturing and consumption sectors. Factors driving the rubber industry in the country include the positive intervention of institutional agencies that aim at self-sufficiency and import substitution.
- With the ever-increasing demand for tires, industrial rubber, adhesives, and sealants in the region and the expansion of production plants by several major players in the industry, the market for liquid synthetic rubber is also expected to grow steadily during the forecast period.
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