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International Rubber Study Group

The World Rubber Industry: review to 2020


India Rubber Expo 2011
Chennai, India
19-21 January 2011
Prepared by the IRSG Secretariat
www.rubberstudy.com

Themes

World economy as defined by GDP


Vehicle Sector
Tyre sector
Rubber demand forecast
Rubber supply forecast
Potential supply constraints
Potential pricing direction

Data Sources

World economy as defined by GDP is provided by the


IMF and last published in October 2010. Beyond 2015,
IRSG uses its own model projections.
Rubber demand forecast as defined by IRSG
Vehicle and Tyre sector data supported by LMC
Natural Rubber supply potential as defined by IRSG
Oil price forecast as defined by US EIA, May 2010
Feedstock and Synthetic Rubber sector data supported
by CMAI & IISRP.

Global GDP Growth (IMF sourced, %)


6

5
4
3
2
1
0
-1

1990

1995

2000

2005

2010

2015

2020

Vehicles in Use, (Millions of Units)


1200

1000

800
PC

600

LCV
M/HCV

400

200

0
1990

1995

2000

2005

2010

2015

2020

Vehicle Production, (Millions of Units)


90
80
70
60
50

PC
LCV

40

M/HCV

30
20
10
0
1990

1995

2000

2005

2010

2015

2020

Growth in Vehicle Production,


% Annual Growth
Passenger Cars

Commercial
Vehicles

2008

-4.7

-1.4

2009

-12.4

-22.7

2010

20.1

29.9

2011

7.4

18.3

2012

6.6

8.3

2015

3.8

0.3

2018

-0.2

-3.9

2020

1.6

2.1

(% per annum)

Vehicle Tyre Sales, Original Equipment,


(Millions of Units)
450
400
350
300
250

PC
LCV

200

M/HCV

150
100
50
0
1990

1995

2000

2005

2010

2015

2020

Vehicle Tyre Sales, Replacement, (Millions of Units)


1400
1200
1000
800

PC
LCV

600

M/HCV

400

200
0
1990

1995

2000

2005

2010

2015

2020

Growth in Tyre Sales, (% per annum)


% Annual Growth
Passenger Car
Tyres

Commercial
Vehicle Tyres

2008

-2.6

-0.9

2009

-5.4

-10.3

2010

10.6

16.2

2011

6.1

11.0

2012

5.5

8.2

2015

4.0

4.0

2018

1.9

0.8

2020

3.5

4.8

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

Natural Rubber Consumption 2020


(Millions of MT)
18
16
14
12
10
8
6
4
2
0
2005

Tyres 11.4

2010

2015

General Rubber Goods 3.9

2020

Total 15.4

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 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

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 21.3

Global Rubber Consumption by Type to 2020


Low Oil Price Scenario (Millions of MT)
40
35

30
25
20

15
10

5
0
1990

1995

2000

2005

2010

2015

Low Oil Natural Rubber 14.9

Synthetic Rubber 19.0

Total 33.9

IMF

Synthetic Rubber 18.5

Total 33.9

Natural Rubber 15.4

2020

World Rubber Consumption, (Millions MT)


Consumption
Total Rubber
Volume
Million MT

Annual Growth
%

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,

(KT)

30000

25000

20000

China
Europe

15000

India
Japan
USA

10000

Global
5000

0
1990

1995

2000

2005

2010

Global Natural Rubber Consumption,


(Millions of MT)

Consumption
Natural Rubber

Volume
MT

Annual Growth
%

2008

10.2

0.0

2009

9.3

-9.1

2010

10.7

15.0

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

Global Synthetic Rubber Consumption,


(Millions of MT)

Consumption
Synthetic Rubber
Volume
MT

Annual Growth
%

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

3.0

2018

18.1

-0.8

2020

18.5

2.7

Natural Rubber Consumption Share to 2020 (%)


48
46
44
42
40
38
36
34
1990

1995

2000

2005

2010

2015

2020

Global Natural Rubber Normal Production, (KT)


15000
12500
10000
7500

5000
2500
0
1990

1995

2000

2005

2010

Total 13.8 million MT in 2020

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

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 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
<35 +>

1985
<28-34>

1990

1995

<21-27>

2000

<14-20>

2005

2010

<7-13>

<0-6>

2015

2020

Vietnam Natural Rubber Production (KT)


1400
1200
1000

800
600
400

200
0
1990

1995

2000

2005

2010

2015

2020

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

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

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

Theoretical Global Natural Rubber Scenarios


(KT)
16000
15000
14000

13000
12000

Actual Production

11000

Demand

10000

Negative Factors

New Surge NP

9000

Normal Production

8000
7000
6000

2000 2006 2008 2010 2012 2014 2016 2018 2020

Theoretical Global Synthetic Rubber Scenarios


(KT)
20000
18000
16000
14000

Actual Production

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

Crude Oil Price to 2020, (EIA sourced in USD per barrel)


140
120

100
80

60
40
20
0
1990

1995

2000

2005

2010

2015

2020

Price Ratio Trends


6.0

5.0

4.0

NR-Crude

SR-Crude
3.0

BD-Crude
SR-BD
NR-BD

2.0

NR-SR
1.0

0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Conclusions

Supply of Natural Rubber (based on Normal Production)


and Synthetic Rubber (based on Nameplate Capacity) are
both undersupplied by more than 1MMT each by 2020
versus premised demand.
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

Who are we?


Established in 1944 as an inter-governmental
organisation, headquartered in London, UK
As of July 2008, the Group has been based in Singapore.
IRSG is the forum for the discussion of matters affecting
the supply and demand for natural as well as synthetic
rubber.
Authoritative source of statistical data and analysis for
all aspects of the rubber industry.

PLEASE COME AND JOIN IRSG AND TALK TO US!!!

International Rubber Study Group

Thank You for Your Attention