IRSG: Rubber demand to grow through 2030

SINGAPORE—The International Rubber Study Group anticipates an average 2.4-percent annual growth in rubber demand between 2023 and 2031.

In its latest biannual World Rubber Industry Outlook, IRSG said world rubber consumption grew by 11 percent year-on-year to 29.88 million metric tons in 2021, following a deep contraction in 2020.

This, it said, was due to strong recovery in advanced economies and emerging markets such as China and India, which helped demand surpass pre-pandemic levels.

In 2022, however, overall rubber demand‚—including natural rubber and synthetic rubber—is estimated to grow by only 1.8 percent due to a "deceleration in the global economic growth."

IRSG linked the slowdown to "several external shocks," which it said had mainly impacted consumption in the tire sector.

Next year, the organization expects overall rubber demand to increase by 2.8 percent year-on-year and followed by an annual average of 2.4-percent growth during the 2023-31 period.

According to IRSG, the global NR demand recovered by 10.9 percent in 2021, reaching 14.07 million tons, helped by "sharp recovery" in the commercial tire replacement segment in both mature and emerging markets.

The growth in demand is forecast to slow down to 1.9 percent in 2022 and 2.8 percent in 2023, mainly due to "the deceleration in China's demand."

Synthetic rubber demand recorded a solid recovery of 11.1 percent in 2021 with total consumption reaching 15.81 million tons.

IRSG forecasts SR demand to further grow by 1.7 percent in 2022 and 2.8 percent in 2023, tracking a similar trend to NR.

According to IRSG data, NR production recovered by 5.4 percent in 2021, reaching 13.77 million tons, still lower than its 2018 peak.

In 2022, NR supply is estimated to expand by 4.3 percent, reaching 14.36 million tons, supported by expansions in Mekong countries (China, Myanmar, Thailand, Laos, Cambodia and Vietnam) as well as Cote d'Ivoire which is now the fourth largest NR producing country.

Natural rubber production is forecast to further expand by 2.9 percent in 2023.

Over the medium- and long-term, IRSG said it expected the market to tighten due to the lower rate of new plantation development and replanting compared to demand.