The International Rubber Study Group (IRSG), an International Body for improving the transparency of the world rubber market and strengthening the international cooperation on rubber issues, publishes comprehensive data on production, consumption, trade and prices- covering both natural rubber (NR) and synthetic rubber (SR). It has recently released the July 2021 edition of the World Rubber Industry Outlook (WRIO). The biannual report presents the latest long-term forecasts for the next ten years, covering the world economy as well as the vehicle, tyre and rubber sectors.
The current forecast in WRIO comprises two economic scenarios, Base Case Scenario rooted from the IMF’s base line GDP forecast; Downside Scenario assumes bottlenecks in reaching effective vaccine protection and high infection rates of Covid-19 variants have a drag on the normalization in mobility and recovery in contact-intensive sectors in 2021 and 2022.
According to WRIO, the global rubber demand declined by 6.0% in 2020, reaching 27.07 million tonnes, the contraction in 2020 is 1.1 percentage points smaller than IRSG’s earlier projection because of strong recovery in the second half of 2020 in the advanced economies and China. The vaccine powered recovery in a few advanced economies amid high infection rates of the virus variant, low vaccination rate and more sluggish growth in developing countries are leading to a lopsided global recovery, which explains much of the upward revision in global outlook in 2021 under the Base case Scenario.
The global rubber demand in tyre sector is expected to recover by 7.2% in 2021 from a deeper contraction (-7.3%) experienced in 2020. A stronger recovery projected for non-tyre sector (7.6%) is driven by continuing surge in demand for rubber products in the global healthcare industry and stronger recovery of rubber products in the supply chain of mobility. The total rubber demand is forecast to rebound by 7.4% in 2021 and moderate to 4.7% in 2022 under the IMF Scenario.
The global NR demand contracted by 6.8% in 2020, reaching 12.71 million tonnes and projected to rebound by 7.1% in 2021, owing to sharp recovery expected in CV segment in the mature and emerging markets. The world SR demand declined by 5.3% reaching 14.36 million tonnes in 2020 and is forecast to recover by 7.6% in 2021 supported by stronger growth in the US, Europe, and emerging Asia.
The global NR production declined by 5.1% in 2020 reaching 13 million tonnes. Tapping days lost due to risks associated with extreme weather, spread of leaf fall disease and labour shortage during the pandemic crisis disrupted production in major producing countries in South-East Asia. As many natural rubber producing countries are badly affected by the virus variants, a lower rate of total planting likely has impact on the medium and longer-term supply. Total NR production is forecast to rebound by 6.5%, reaching 13.86 million tonnes and exceeding the pre-pandemic 2019 level. NR production growth will moderate to 3.5% in 2022.
For more information about IRSG, visit www.rubberstudy.org