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Natural Rubber Trends Will be Closely Related to the Tire Industry Boom

Rubber plays a vital role in the global economy, with major applications in the automotive, consumer goods, manufacturing, and medical industries. Natural rubber is collected from rubber trees, is transformed through remilling plants that wash it (removing leaves, insects, dirt, etc.), blend it (to ensure consistency), dry it and package it before selling it on in the form of either smoked rubber sheets or bales of rubber. The automotive industry (tire & tube) is the major segment which consumes largest share of natural rubber. Rubber markets have historically been centered in the Asia Pacific region and industry players produce and export to the other nations either as raw material or manufactured goods. Due to substitutability factor, natural rubber competes with synthetic rubber for the market demand.

Natural rubber can be majorly divided into ribbed smoked rubber (RSS), technically specified rubber (TSR) and latex concentrate. RSS is made directly from latex which is treated and then made to coagulate. The coagulated latex sheets are then air dried or smoked in ovens. The smoked sheets are visually graded on the basis of certain parameters and then packed in bales. TSR can be produced both from field latex as well as from latex coagulum or what is commonly known as cup-lump. It is graded according to precise technical parameters such as dirt content, ash content, nitrogen content, volatile matter and properties of the rubber. Latex is a stable dispersion (emulsion) of polymer micro particles in an aqueous medium. Some of the latex are particularly non-vulcanized rubber. Such is the case in products like latex gloves, latex condoms and latex clothing. In 2016, these three types respectively covered a market share of 33.69%, 43.39% and 16.73%.

Natural rubber can be applied in automobiles as different components, most of them are tires, and can be applied in gloves to protect hands while performing tasks involving chemicals. Sometimes used in the medical and household institution, and also can be applied in foot wear and belting &hose. In 2016, these different applications respectively covered market share of 68.11%, 7.15%, 2% and 10.30%.

The Current Situation of Global Natural Rubber Market

Natural rubber companies are mainly from Asia; the industry concentrate rate is high. The top three companies are Von Bundit, Sri Trang Agro-Industry, Guangdong Guangken Rubber Group, with the revenue market share of 13.68%, 12.16% and 11.36% in 2016.

Southeast Asia was the largest revenue market with a market share of 75.93% in 2012 and 76.48% in 2016 with an increase of 0.28%. China ranked the second market with the market share of 7.69% in 2016. The Asia Pacific market for natural rubber is expected to be the market with the most promising growth rate. Rising per capita income of people in emerging economies such as China, India, Philippines, Thailand, and Vietnam has led to an increase in demand for medical, transportation and electric industries. Growing interest in fitness and outdoor sports of people is fueling the demand for natural rubber.

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The upstream raw material is the production planting base of natural rubber. This is mainly in Southeast Asia, such as Thailand, Indonesia, Malaysia, Vietnam, India, China and so on. Planting natural rubber has a more stringent requirement on the environment and the labor force. Because it is a labor labor-intensive industry, and dependent on climatic conditions to a large extent. Therefore, the cost of labor is the main part of the whole industry. Due to its environment dependent and labor-intensive but North America and Europe are in northerly location and high labor prices, they have no advantage in this industry. In 2016, the market share of North America was only 1.97%, and that of Europe was 1.75%.

According to our research, the global Natural Rubber markets has a total value of 32141.19 M USD back in 2012, and increased to 23853.53 M USD in 2017. We made a series of functional calculation and deduced the data of past 5 years with scientific model. Finally, we made the prediction that the value of Natural Rubber markets can be 34118.31 M USD by 2022.The CAGR of Natural Rubber is 7.42% from 2017 to 2022.

Southeast will remain its first place with a market value of 25695.14 M USD and China as the second largest market will reach a market value of 2699.46M USD by 2023. Tire industry is the largest application end of natural rubber. With its development, natural rubber trends will be closely related to the tire industry boom. Specifically, heavy truck sales in commercial vehicles is a very important tire demand indicator. And general rubber products in health care and construction etc. also is the driver of the natural rubber. It is especially obvious in the emerging market which the downstream industry is growing faster.

There are some limitations for the development of natural rubber market. As an important industrial raw material, the price fluctuations of natural rubber are closely related to the international, domestic economic environment. Tariffs policy in some countries, international rubber league policy and international emergencies will also affect this industry from the cost of raw material to downstream market. Season and climate changes also affect the supply and production of natural rubber, presenting uncertainty for this industry.

Companies in different regions need to take related measures. The government of the United Kingdom, Denmark, France etc. have provided financial subsidies. Natural rubber companies should seize the opportunity to open up downstream markets. The Chinese government has also given support to the natural rubber industry, and the rapid development of Chinese domestic downstream consumer market will promote the development of the rubber industry as a whole. Companies should find the right time to win a larger market share.

What is more, it is a labor-intense industry, and the labor supply and cost is an important factor need to be considered. So, the company who pretend to enter this industry need pay attention to those factors and then make their best decision.

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