International Rubber Demand Recovery Expected To Be Lower Than Expected in 2021

Salvatore Pinizzotto, Secretary-General of the International Rubber Research Group (IRSG), said that despite the strong growth in demand for rubber in Asia, especially China, the demand recovery in the international rubber market in 2021 is expected to be lower than expected due to possible delays in large-scale vaccine rollout.

Among them, the sales growth of automobiles and tires will affect market demand in the short term. In addition, he expects the scrap tire industry to grow significantly in the short term. The glove industry, in particular, may be the key to driving rubber demand to the "next normal."

According to Salvatore Pinizzotto, in 2020, under the influence of travel restrictions caused by epidemic prevention, tire and car sales have been affected to a certain extent, which has resulted in a significant impact on international rubber demand. Taking into account the strong demand for economic recovery in major economies this year and the continued expansion of vaccination coverage, IRSG predicts that natural rubber demand will grow by 7% in 2021, and synthetic rubber demand will grow by 7.2%. As for production, natural rubber production will increase by 5% in 2021. The decline in production in Southeast Asian countries will be offset by growth in other producing areas.

In fact, he believes that because the economic recovery in different regions is affected by the spread of the epidemic, anti-epidemic measures and monetary policies, the recovery of the entire rubber supply chain is different. But in general, the rubber industry is currently shifting from the past "just in time" production model to a "just in case" production model.

In addition, Salvatore Pinizzotto said that relevant agencies also need to pay attention to the decline in the attractiveness of agricultural activities and the impact of global warming on rubber production. You must know that rubber planting and harvesting are labor-intensive tasks. In the past period of time, rubber prices have continued to run at low levels, and with the increase in production costs, the number of people involved in rubber planting and harvesting work in the market is declining. At the same time, with the increase in extreme weather, rubber planting in some areas has also been affected.