Summary
The liquid synthetic rubber market is projected to register a CAGR of over 4% during the forecast period.
COVID-19 negatively impacted the market in 2020-2021. Considering the pandemic scenario, automotive manufacturing activities were temporarily stopped during the government-imposed lockdown to curb the spread of new COVID-19 cases, thereby reducing the demand for liquid synthetic rubber-based automotive parts such as tires, drive belts, seals, gaskets, hoses, tank linings, and others. However, the market is expected to regain its growth trajectory in 2023 and is likely to follow a similar trajectory during the forecast period.
Key Highlights
Over the short term, the rising demand from the adhesive segment is expected to drive the market’s growth.
On the flip side, fluctuating raw material prices are expected to hinder the market growth.
Developing bio-based feedstock for synthetic rubber will likely act as an opportunity during the forecast period.
The Asia-Pacific region dominated the liquid synthetic rubber market, with the largest consumption from countries such as China, India, and Japan.
Liquid Synthetic Rubber Market Trends
Increasing Demand from the Tire Segment
Liquid synthetic rubber includes wide applications in the manufacturing of tires because it provides enhanced durability and superior performance, along with the adoption of tire labeling regulations.
The primary product used in the manufacturing of tires is polybutadiene. It is primarily used as a sidewall in tires to improve fatigue caused by continuous flexing during the run. Besides, butadiene includes various applications in other automobile parts.
The Organisation Internationale des Constructeurs d’Automobiles (OICA) estimates that 80.14 million vehicles were manufactured globally in 2021, representing an increase in growth of around 3% compared to the previous year. Thus, during the research period, an increase in motor vehicle manufacturing is projected to fuel tire demand.
In the United States, there are around 47 tire manufacturing plants with a total capacity of 760.06 thousand daily units. These manufacturing capacities include passenger cars, trucks, light trucks, and other tires. According to the US Tire Manufacturers Association (USTMA), the total US tire shipments accounted for about 332.7 million units in 2021, which is expected to drive the demand for the market studied.
The US Tire Manufacturers Association also stated that tires used in passenger and light trucks use 24% of synthetic rubber (such as SBR), and heavy trucks use 11% of synthetic rubber by volume.
According to the China Association of Automobile Manufacturers, China also saw an increase in automotive production in the country of around 3.4% in the year 2022 compared to the previous year. Around 27.02 million automobile units were produced in 2022 compared to 26.08 million in 2021.
Overall, all the factors above have impacted tire production, which is further expected to affect the liquid synthetic rubber market.
Asia-Pacific Region to Dominate the Market
The Asia-Pacific region is expected to dominate the market for liquid synthetic rubber during the forecast period. In countries like China, India, and Japan, owing to the increasing demand from applications such as tire manufacturing, industrial rubber manufacturing, adhesives, sealants, coatings, and polymer modification.
China is the largest producer and consumer of automotive vehicles. The China Association of Automobile Manufacturers reports that, compared to the prior year, China’s automobile sales increased by about 2.1% in 2022. Compared to the 26.27 million automobiles sold in 2021, around 26.86 million were sold in 2022.
Liquid synthetic rubber also finds its application in the construction industry. According to National Development and Reform Commission, the Chinese government approved 26 infrastructure projects at an estimated investment of about USD 142 billion, estimated to be completed by the end of 2023 and ongoing. The increase in the construction of tall buildings and hotels is driving the market studied.
India is the fourth-largest consumer of rubber in the world as of 2022. Rubber usage per capita in India is currently 1.2 kg, compared to 3.2 kg globally. India’s rubber industry generates approximately INR 12,000 crores (~USD 1,447 million). The tire sector consumes most of India’s rubber production, accounting for over half of the country’s total output.
Indian rubber industry exhibits the co-existence of the rubber production sector and the fast-growing rubber products manufacturing and consuming sector. Factors driving the rubber industry in the country include positive intervention of institutional agencies that aim at self-sufficiency and import substitution.
With the ever-increasing demand for tires, industrial rubber, adhesives, and sealants in the region and the expansion of production plants of several major players in the industry, the market of liquid synthetic rubber is also expected to grow steadily during the forecast period.
Liquid Synthetic Rubber Industry Overview
The liquid synthetic rubber market is fragmented in nature, with the presence of a wide range of players worldwide. Some of the players that maintain a significant share in the global market include (not in particular order) China National Petroleum Corporation, JSR Corporation, Evonik Industries AG, Kumho Petrochemical, and Asahi Kasei Corporation.
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