International Rubber Study Group
Trends and Challenges in the Global Rubber
Supply and Demand: An Overview
Asian Commodities & Derivatives Conference
Jakarta, Indonesia
23 May 2011
Prepared by the IRSG Secretariat
www.rubberstudy.com
Themes
Economic Recovery
Global Rubber Demand Forecast
Natural Rubber Supply Potential
Global Trade Flows
Global Rubber Balance
Potential Challenges
Data Sources
World economy as defined by GDP is provided by the
IMF. Beyond 2015, IRSG uses its own model projections
Vehicle and Tyre sector data supported by LMC
Oil price forecast as defined by EIA
Feedstock and Synthetic Rubber sector data supported
by CMAI & IISRP
Rubber demand forecast as defined by IRSG
Natural Rubber supply potential as defined by IRSG
Natural and Synthetic Rubber demand as defined IRSG
Global GDP Growth (IMF sourced, %)
6
5
4
3
2
1
0
-1
1990
1995
2000
2005
2010
2015
2020
Global Rubber Consumption by Type to 2020,
(Millions of MT)
40
35
30
25
20
15
10
5
0
1990
1995
Natural Rubber 15.4
2000
2005
2010
Synthetic Rubber 18.5
2015
Total 33.9
2020
World Rubber Consumption, (Millions MT)
Consumption
Total Rubber
Volume
Annual Growth
Million MT
2008
22.8
-2.5
2009
21.1
-7.5
2010
24.3
15.3
2011
25.8
6.3
2012
27.3
5.5
2015
30.4
3.6
2018
32.5
0.2
2020
33.9
3.3
Rubber Consumption 2020, (Millions of MT)
40
35
30
25
20
15
10
5
0
1990
1995
Tyres 21.4
2000
2005
2010
General Rubber Goods 12.5
2015
Total 33.9
2020
Tyre Rubber Consumption by Type to 2020,
(Millions of MT)
25
20
15
10
5
0
2005
2010
Natural Rubber 11.4
2015
Synthetic Rubber 9.9
2020
Total 21.4
Natural Rubber Consumption 2020
(Millions of MT)
Tyres 11.4
General Rubber Goods 3.9
Total 15.4
Global Natural Rubber Consumption,
(Millions of MT)
Consumption
Natural Rubber
Volume
Annual Growth
MT
2008
10.2
2009
9.3
-9.1
2010
10.7
15
2011
11.2
4.6
2012
11.6
3.9
2015
13.1
4.3
2018
14.4
1.5
2020
15.4
4.1
Synthetic Rubber Consumption 2020
(Millions of MT)
20
18
16
14
12
10
8
6
4
2
0
2005
Tyres 9.9
2010
2015
General Rubber Goods 8.6
2020
Total 18.5
Global Synthetic Rubber Consumption,
(Millions of MT)
Consumption
Synthetic Rubber
Volume
Annual Growth
MT
2008
12.6
-4.7
2009
11.8
-6.3
2010
13.6
15.6
2011
14.7
7.6
2012
15.7
6.7
2015
17.3
2018
18.1
-0.8
2020
18.5
2.7
General Framework for NR Supply
The trend in production will be called normal
production.
Production exceeds normal production at times of
high prices and vice versa.
Normal production is derived using the vintage
approach.
The composition of the total area for natural rubber
according to the year of planting (the vintages).
The average yield profile for a hectare of rubber
during its life.
Technical progress in quality of clones affecting yield
profiles of hectares planted in various years.
Natural Rubber Supply to 2020
Projections of supply potential depend on existing
area composition and future planting policies.
The Normal Production concept is analogous to
Nameplate Capacity and has no reference to price.
Global Natural Rubber Normal Production, (KT)
15000
12500
10000
7500
5000
2500
0
1990
1995
2000
2005
2010
2015
2020
Thailand Age Distribution of Area (KHa)
2500
2000
1500
1000
500
0
1975
1980
1985
<0-6>
1990
<7-13>
1995
<14-20>
2000
<21-27>
2005
2010
<28-34>
2015
<35 +>
2020
Thailand Natural Rubber Production
(KT)
4000
3500
3000
2500
2000
1500
1000
500
0
1990
1995
2000
2005
2010
2015
2020
Indonesia Smallholding Age Distribution of
Area (KHa)
3500
3000
2500
2000
1500
1000
500
0
1975
1980
1985
<0-6>
1990
<7-13>
1995
<14-20>
2000
<21-27>
2005
<28-34>
2010
2015
<35 +>
2020
Indonesia Estate Age Distribution by Area (KHa)
450
400
350
300
250
200
150
100
50
0
1975
1980
1985
<0-6>
1990
<7-13>
1995
<14-20>
2000
<21-27>
2005
2010
<28-34>
2015
<35 +>
2020
Indonesia Natural Rubber Production
(KT)
3000
2500
2000
1500
1000
500
0
1990
1995
2000
2005
2010
2015
2020
Malaysia Smallholding Age Distribution of
Area (KHa)
1600
1400
1200
1000
800
600
400
200
0
1975
1980
1985
<35 +>
1990
<28-34>
1995
<21-27>
2000
2005
<14-20>
2010
<7-13>
2015
<0-6>
2020
Malaysia Estate Age Distribution by Area (KHa)
600
500
400
300
200
100
0
1975
1980
1985
<35 +>
1990
<28-34>
1995
<21-27>
2000
2005
<14-20>
2010
<7-13>
2015
<0-6>
2020
Malaysia Natural Rubber Production
(KT)
1600
1400
1200
1000
800
600
400
200
0
1990
1995
2000
2005
2010
2015
2020
Vietnam Age Distribution of Area (KHa)
900
800
700
600
500
400
300
200
100
0
1975
1980
1985
<35 +>
1990
<28-34>
1995
<21-27>
2000
<14-20>
2005
<7-13>
2010
<0-6>
2015
2020
Vietnam Natural Rubber Production
(KT)
1400
1200
1000
800
600
400
200
0
1990
1995
2000
2005
2010
2015
2020
India Age Distribution of Area (KHa)
900
800
700
600
500
400
300
200
100
0
1975
1980
1985
<0-6>
1990
<7-13>
1995
<14-20>
2000
<21-27>
2005
<28-34>
2010
2015
<35 +>
2020
India Natural Rubber Production
(KT)
Cambodia, Lao and Myanmar-Natural Rubber
Production (KT)
Synthetic Rubber Supply to 2020
IRSG has historically assumed that monomer
feedstocks and manufacturing capacity is available on
an unlimited basis, going forward.
Based on recent market experience, with
petrochemical cracker diets going lighter, butadiene
supply being constrained, plus its price becoming
uncoupled from traditional crude oil price drivers,
this above narrow view must now be challenged and
built into future scenarios for modeling activities.
Butadiene Demand 2014, (KT)
9000
8000
7000
6000
ABS
5000
Adiponitrile
4000
Synthetic
Rubber
Others
3000
2000
1000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Olefin Cracker Yields, (MT for MT of Feedstock)
1.00
0.90
0.80
Bitumen
Gas oil
Gasoline
Fuel gas
Butadiene
Butylene
Propylene
Ethylene
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Ethane
Propane
Butane
Naphtha
Gas Oil
Butadiene Supply 2014, (KT)
16000
14000
12000
BD Capacity
10000
BD Production
8000
BD Demand
C4 Supply
6000
4000
2000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Crude Oil Price to 2020 (EIA sourced in USD per barrel)
210
160
110
60
10
1990
1995
2000
2005
2010
2015
2020
Natural Rubber Exports-Major Producers
Natural Rubber Imports-Major Consumers
Synthetic Rubber Exports-Major Consumers
Synthetic Rubber Imports-Major Consumers
Potential Challenges
Positive externalities
Surge in planting area in line with 2005-08 period
Negative externalities
Production shift from traditional to non-traditional region and
its likely influence on productivity and immaturity period
Climate change
Labour shortage
Alternative Crops and land use
Upstream vs. downstream
Strategic drive within major NR producing countries to develop
local downstream consuming industries, in potential conflict
with the urge of China and India to consume more
Global Natural Rubber Scenarios (KT)
Global Natural Rubber Balance(Millions of MT)
Consumption
Normal production
NP/Consumption ratio
2000
7.4
7.6
1.02
2005
9.2
8.5
0.93
2008
10.2
8.9
0.88
2009
9.3
9.0
0.97
2010
10.7
9.2
0.87
2011
11.2
9.5
0.85
2012
11.6
9.9
0.86
2015
13.1
11.6
0.88
2018
14.4
13.0
0.90
2020
15.4
13.8
0.89
Theoretical Global Synthetic Rubber Scenarios
(KT)
20000
18000
16000
14000
ActualProduction
12000
Demand
10000
Nameplate
Capacity
8000
6000
2005
2007
2009
2011
2013
2015
2017
2019
Price Trends (USD per MT)
4000
3500
3000
2500
NR
2000
BR
BD
1500
Crude
1000
500
0
1990
1995
2000
2005
2010
Conclusions
Supply of Natural Rubber (based on Normal Production)
over the planning period is at the best balanced versus
premised demand, assuming high prices stimulate over
tapping.
Current high market prices for Natural Rubber may
stimulate a further surge in new planting area as last
seen in the 2005-08 period, which is not fully reflected
in current supply forecasts.
It is vital to understand the global Oil Natural Gas
position and their impact on Butadiene and Synthetic
Rubber availability and price going forward.
International Rubber Study Group
Thank You for Your Attention
