With rubber prices hovering at a dismal low for the past five years, against an oversupply situation in both synthetic and natural rubbers and weakening crude oil outlook, the industry is pacing itself, said officials speaking at the World Rubber Summit (WRS), held in Singapore from 24-25 March. A joint integrated platform organised by Singapore-headquartered International Rubber Study Group (IRSG), Singex Exhibitions, in partneship with International Enterprise (IE), and the Singapore Exchange, the summit was also held together with the tenth edition of the Tyrexpo Asia exhibition at the Singapore Expo.
Speaking at the opening ceremony Stephen Evans, Secretary-General of IRSG, said, “This is the fifth year of disappointing global demand, against excess capacity, and a general sentiment of gloom, due to the slowdown of the Chinese economy.” China’s economy grew 7.4% last year, its lowest since 1990, and is projected to grow 6.5% this year, according to research house IHS.
The oversupply of rubber is brought about by expansions of plantations in Southeast Asia from 2011-2014 and will hold on until 2016, according to Evans. The glut is expected to drop to 51,000 tonnes by 2016, fom 77,000 tonnes in 2015. But he went on to say that the long-term growth of the sector on the horizon is optimistic due to infrastructure development expected in emerging economies. The sector is expected to have a marginal growth of 2% this year and 4% next year, said Evans.
With tyres accounting for 70% of rubber use, Evans also said IRSG expects tyre sales to grow. “Passenger car tyres sales will reach 1.72 billion units by 2023 from 1.23 billion in 2014; commercial vehicle tyre sales will reach 727 million units from 479 million units and1.6 billion vehicles are to be on the roads by the end of the decade; with16.5 million tonnes of rubber to be produced by 2023.”
Meanwhile, Richard Kramer, Chairman/CEO of US-based Goodyear Tire & Rubber reaffirmed the company’s ties to the industry, calling it “a great industry to be in, both now and in the future”, in his keynote speech. He pointed out that the growth of the middle classes in developing markets will be a key driver for industry growth, while in mature markets, he expects growth being driven by the changing mix to high-value tyres.
Themed “Productivity and Sustainability for Tomorrow’s market — what drives it?”, WRS’s programme touched on strategic policy-led issues that impact the rubber industry, with speakers from India, China, Thailand, Malaysia and Vietnam giving their views on the sector.
Since WRS was held a day after Singapore’s first Prime Minister Lee Kuan Yew’s death, the opening had a minute’s silence to acknowledge his contributions to the country’s growth and in tribute to his passing.