Market aspects of natural rubber


Currently natural rubber is not produced in Europe so the EU is totally dependent of imports from the natural rubber key production countries. In 2015 the EU imported about 1.2 million tons of natural rubber. 34% of this amount came from Indonesia, 18% originated from Thailand and further 16 % came from Cote d’Ivoire (ETRMA, 2016, http://www.etrma.org/uploads/documents/20161208%20-%20Statistics%20booklet%202016%20FINAL5.pdf).

 The share of Malaysia’s natural rubber is obviously decreased in the last years, because Malaysia has moved to other crops market and non-agricultural investments (IHS Markit, 2017, https://www.ihs.com/products/natural-rubber-chemical-economics-handbook.html). Therefor the share of Indonesia increased and gets the fourth position of exports to the EU.

The consumption of natural rubber in the EU is mainly driven by the tyre industry which amounts to 76% of the total demand in 2016 (see Figure 1). The residual 24% in 2016 belongs to the General Rubber Goods (GRG) sector. The fluctuations in demand are very low (except 2009) and the distribution of tyre and GRG demand is rather consistent since 2008.

To identify the yearly natural rubber market surplus or deficit the annual production and consumption are compared in Figure 2. In 2012 and 2013 there was a significant market surplus in the natural rubber industry as crisis in the Eurozone existed. This depressed the truck and bus market and other rubber product industries, which are the main drivers of the natural rubber demand (IHS Markit, 2017, https://www.ihs.com/products/natural-rubber-chemical-economics-handbook.html). Only small differences in production/consumption balance existed in 2014 and 2015. Production in 2016 has declined because of the heavy rains and flooding in parts of Thailand and Malaysia, who are major producers of natural rubber (LMC International, 2017, https://www.lmc.co.uk/Rubber-LMC_Rubber_Bulletin). The International Rubber Study Group (IRSG) and LMC International Ltd (LMC) have forecasted a sharp increase in demand and in total a market deficit for the years 2020 and 2025. Tyres market grew in the last five years (2011 – 2016) at a rate of 2.5% per year and is predict to grow further 2.9% per year between 2016 and 2021. GRG consumption will also grow 2.9% per year until 2021. (IHS Markit, 2017, https://www.ihs.com/products/natural-rubber-chemical-economics-handbook.html)