2023 is Likely to Witness Significant Growth in the Global Rubber Industry
- 03-Mar-2023 3:16 PM
- Journalist: Patricia Jose Perez
Texas, USA: The offtake of Rubber fell significantly in the global market during 2022 owing to the shortage of microchips and continuing supply chain disruptions. In the first two months of 2023, various elastomers, such as EPDM Rubber, tried gaining stability in the market. Now, as 2023 proceeds, experts predict that this year, the rubber industry will showcase notable recoveries in terms of market performance. The abandonment of China's zero-Covid policy and Russia's ongoing conflict with Ukraine are two major global economic drivers, and both significantly impact the future of the world's demand for Rubber.
After a strong comeback in 2021, global demand for Rubber declined as the automotive industry suffered from protracted supply problems and chip shortages. According to IRSG, this "dark development" kept exerting downward pressure on OE production and sales, negatively affecting global rubber consumption. It went on to say that in 2022, the combined demand for Natural Rubber (NR) and Synthetic Rubber (SR) "declined somewhat," mostly because of a decline in demand from the tire industry.
As per the statements by Singapore-based IRSG on 20th February 2023, the recent reopening has prepared the path for a faster-than-expected rebound. On the other hand, a potential escalation in the continuing crisis in Ukraine and a tightening global economic environment might exacerbate debt distress and add to the outlook's negative effects. The rubber industry association stated, "The balance of risks remains weighted to the downside, although the adverse risks have been mitigated as we enter 2023. Therefore, the total demand for NR and SR is expected to increase by 2.6% in 2023, reaching an estimated 30.64 million tonnes, according to IRSG.
As per ChemAnalyst's anticipations, "The demand for Rubber would increase significantly as soon as the second quarter of 2023 starts owing to the improved market performances of the downstream automotive and tire industries. The rise in offtake in the rubber industry would then surge the market value of rubbers."