02. The World Rubber Industry – review and prospects to 2020- stephen evans.pdf

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

International Rubber Study Group

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, %)

-1

0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020

Vehicles in Use, (Millions of Units)

0

200

400

600

800

1000

1200

1990 1995 2000 2005 2010 2015 2020

PC

LCV

M/HCV

Vehicle Production, (Millions of Units)

0

10

20

30

40

50

60

70

80

90

1990 1995 2000 2005 2010 2015 2020

PC

LCV

M/HCV

Growth in Vehicle Production, (% per annum)

% 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

Vehicle Tyre Sales, Original Equipment,

(Millions of Units)

0

50

100

150

200

250

300

350

400

450

1990 1995 2000 2005 2010 2015 2020

PC

LCV

M/HCV

Vehicle Tyre Sales, Replacement, (Millions of Units)

0

200

400

600

800

1000

1200

1400

1990 1995 2000 2005 2010 2015 2020

PC

LCV

M/HCV

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)

Tyres 21.4 General Rubber Goods 12.5 Total 33.9

0

5

10

15

20

25

30

35

40

1990 1995 2000 2005 2010 2015 2020

Natural Rubber Consumption 2020 (Millions of MT)

Tyres 11.4 General Rubber Goods 3.9 Total 15.4

0

2

4

6

8

10

12

14

16

18

2005 2010 2015 2020

Synthetic Rubber Consumption 2020 (Millions of MT)

Tyres 9.9 General Rubber Goods 8.6 Total 18.5

0

2

4

6

8

10

12

14

16

18

20

2005 2010 2015 2020

Global Rubber Consumption by Type to 2020, (Millions of MT)

Natural Rubber 15.4 Synthetic Rubber 18.5 Total 33.9

0

5

10

15

20

25

30

35

40

1990 1995 2000 2005 2010 2015 2020

Tyre Rubber Consumption by Type to 2020, (Millions of MT)

Natural Rubber 11.4 Synthetic Rubber 9.9 Total 21.3

0

5

10

15

20

25

2005 2010 2015 2020

Global Rubber Consumption by Type to 2020

Low Oil Price Scenario (Millions of MT)

IMF Natural Rubber 15.4 Synthetic Rubber 18.5 Total 33.9

Low Oil Natural Rubber 14.9 Synthetic Rubber 19.0 Total 33.9

0

5

10

15

20

25

30

35

40

1990 1995 2000 2005 2010 2015 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)

0

5000

10000

15000

20000

25000

30000

1990 1995 2000 2005 2010

China

Europe

India

Japan

USA

Global

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 (%)

34

36

38

40

42

44

46

48

1990 1995 2000 2005 2010 2015 2020

Global Natural Rubber Normal Production, (KT)

0

2500

5000

7500

10000

12500

15000

1990 1995 2000 2005 2010 2015 2020

Total 13.8 million MT in 2020

Thailand Age Distribution of Area (KHa)

0

500

1000

1500

2000

2500

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

<0-6> <7-13> <14-20> <21-27> <28-34> <35 +>

Thailand Natural Rubber Production (KT)

0

500

1000

1500

2000

2500

3000

3500

4000

1990 1995 2000 2005 2010 2015 2020

Indonesia Smallholding Age Distribution of Area (KHa)

0

500

1000

1500

2000

2500

3000

3500

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

<0-6> <7-13> <14-20> <21-27> <28-34> <35 +>

Indonesia Natural Rubber Production (KT)

0

500

1000

1500

2000

2500

3000

1990 1995 2000 2005 2010 2015 2020

Malaysia Smallholding Age Distribution of Area (KHa)

0

200

400

600

800

1000

1200

1400

1600

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

<35 +> <28-34> <21-27> <14-20> <7-13> <0-6>

Malaysia Natural Rubber Production (KT)

0

200

400

600

800

1000

1200

1400

1600

1990 1995 2000 2005 2010 2015 2020

Vietnam Age Distribution of Area (KHa)

0

100

200

300

400

500

600

700

800

900

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

<35 +> <28-34> <21-27> <14-20> <7-13> <0-6>

Vietnam Natural Rubber Production (KT)

0

200

400

600

800

1000

1200

1400

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)

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ABS

Adiponitrile

Synthetic

Rubber

Others

Butadiene Supply 2014, (KT)

0

2000

4000

6000

8000

10000

12000

14000

16000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

BD Capacity

BD Production

BD Demand

C4 Supply

Olefin Cracker Yields, (MT for MT of Feedstock)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Ethane Propane Butane Naphtha Gas Oil

Bitumen

Gas oil

Gasoline

Fuel gas

Butadiene

Butylene

Propylene

Ethylene

Theoretical Global Natural Rubber Scenarios (KT)

6000

7000

8000

9000

10000

11000

12000

13000

14000

15000

16000

2000 2006 2008 2010 2012 2014 2016 2018 2020

Actual Production

Demand

Negative Factors

New Surge NP

Normal Production

Theoretical Global Synthetic Rubber Scenarios (KT)

6000

8000

10000

12000

14000

16000

18000

20000

2005 2007 2009 2011 2013 2015 2017 2019

Actual Production

Demand

Nameplate Capacity

Price Trends (USD per MT)

0

500

1000

1500

2000

2500

3000

3500

4000

1990 1995 2000 2005 2010

NR

BR

BD

Crude

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

0

20

40

60

80

100

120

140

1990 1995 2000 2005 2010 2015 2020

Price Ratio Trends

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

NR-Crude

SR-Crude

BD-Crude

SR-BD

NR-BD

NR-SR

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!!!

Thank You for Your Attention

International Rubber Study Group