Synthetic Rubber Market Outlook to 2030

Global Synthetic Rubber Market Overview

In 2023, the global synthetic rubber market was valued at USD 36 Bn growing remarkably in the historical period of 2018-2023 driven by automotive production surge, growing infrastructure development, increased adoption of electric vehicles (EVs), and healthcare sector growth. The market is expected to continue its upward trajectory due to advancements in rubber manufacturing technologies and the increasing focus on sustainability.

The market is extremely fragmented with producers having high market share in domestic regions. Sinopec, Arlanxeo, Kumho Petrochemicals, PetroChina, SIBUR, ExxonMobil Chemicals, and TSRC Corporation are some of the prominent players in the market.

Kumho Petrochemical, SK geo centric, and Tongsuh Petrochemical have signed an MOU to establish a sustainable bio raw material supply chain for converting acrylonitrile (AN) and butadiene (BD) into bio-monomers for synthetic rubber production. This collaboration aims to reduce the carbon footprint of synthetic rubber manufacturing, aligning with global efforts to promote eco-friendly materials in industrial applications.

Global Synthetic Rubber Current Market Analysis

APAC as dominant region: APAC region consumes the largest share of synthetic rubber, as it controls two-fifth of the tire market sales globally. The growth of the market is driven by rubbers like silicone rubber(Q), which are used in medical equipment (including pacemakers, stents, respiratory masks, and feeding tubes), and food packaging and processing.This trend is supported by capacity expansions from companies such as Elkem S.A., which is adding 200,000 tonnes at its Elkem Silicones Xinghuo facility in Yongxiu, China. APAC is home to some of the world's largest automotive manufacturing hubs, including China, Japan, South Korea, and India, drive significant consumption of synthetic rubber for tyres. In 2023, Japan produced 7.77 million passenger cars making it one of the leading car manufacturing countries in the region.

Europe as an emerging region: North America is the second-largest region in the market driven by factors including Strong Automotive Industry, Advanced Manufacturing Capabilities, and Rising Demand for Electric Vehicles (EVs). Additionally, growing environmental regulations have increased the demand for sustainable rubber development and manufacturing. This is evident from Ohio's recent USD 51M award to enhance its 'polymer cluster,' which involves funding for California-based BioVerde to produce green, synthetic rubber from sustainable bio-based butadiene. The growing adoption of electric vehicles in North America is increasing the demand for synthetic rubber, in 2023, about 1.6 million EVs were sold in the U.S., representing a 60% increase from the 1 million sold in 2022.

China as dominant country: China is the dominant country in the market owing to the largest automotive industry, massive manufacturing base, government support and strategic investments, and abundant raw material supply. China is the world's largest automotive producer and consumer, which drives substantial demand for synthetic rubber. In 2023, Vehicle production and sales volumes increased by 2.5% and 4.8% year-over-year (y/y), respectively. The total production and sales for June were 2.561 million units and 2.622 million units. Additionally, China has a vast and diversified manufacturing sector that relies heavily on synthetic rubber for various applications, including consumer goods, electronics, and industrial products.

Global Synthetic Rubber Market Segmentation

The Global Synthetic Rubber Market can be segmented based on several factors:

By Type: The market is segmented by type into SBR, BR, EPDM, NBR, IIR, and Others (Including CR, Q, PUR, etc.). In 2023, the SBR sub-segment led the market by type, capturing the largest market share. This dominance is attributed to its extensive use in tire manufacturing and its superior properties such as abrasion resistance and aging stability, making it a preferred choice in various applications.

By Form: The market is segmented by form into Liquid and Solid. In 2023, the Liquid sub-segment dominated the market by form, capturing the largest market share. This dominance is due to the liquid form's versatility in various applications, including coatings, adhesives, and sealants, where ease of application and consistent performance are critical.

By End-User Type: The market is segmented by end-user type into tire and tire products, industrial equipment, footwear, medical equipment, adhesives and sealants, and other (incl. textile, sportswear, etc.). In 2023, the Tire and Tire Products sub-segment led the market by end-user type, capturing the largest market share. This dominance is driven by the ever-growing demand for automotive tires, which require synthetic rubber for enhanced performance and durability.

Global Synthetic Rubber Market Competitive Landscape

LANXESS: At Tire Technology Expo 2024, LANXESS took center stage by showcasing its innovative range of sustainable rubber additives and solutions, designed specifically to help tire manufacturers minimize their ecological impact. Under the theme Less is More, LANXESS emphasized the importance of reducing material usage, energy consumption, and emissions in the tire production process without compromising on performance.

TSRC Corporation (TSRC): By the end of 2023, TSRC Corporation (TSRC) strategically increased its shareholding in Shen Hua Chemical Industrial Co., Ltd. (Shenhua Chemical) to 88%, marking a significant milestone in its synthetic rubber business expansion. This move is poised to positively impact TSRC's operations by substantially enhancing its production capacity and solidifying its market presence in mainland China, one of the world's largest and fastest-growing markets for synthetic rubber.

Zeon Corporation: Zeon Corporation and Sumitomo Chemical have agreed to dissolve their joint venture, ZS Elastomer Co. Ltd. As a result, ZS Elastomer will become a wholly owned subsidiary of Zeon Corporation, effective October 1, 2024. This move allows Zeon to fully integrate ZS Elastomer's operations, enhancing its strategic focus and capabilities in the synthetic rubber market.

Global Synthetic Rubber Industry Analysis

Global Synthetic Rubber Market Growth Drivers:

Increased Adoption of Electric Vehicles (EVs): The growing adoption of electric vehicles (EVs) is fueling the demand for advanced synthetic rubbers, essential for high-performance tires and components. In 2023, 14 million new electric cars were registered globally, representing a 35% year-on-year increase from 2022. Additionally, electric vehicles represented 18% of all car sales, up from 14% in 2022 and a mere 2% in 2018. Battery electric vehicles (BEVs) made up 70% of the EV fleet in 2023, reflecting a strong and accelerating market. This trend is expected to continue as the global transition to electrification deepens, pushing further advancements in synthetic rubber technologies.

Automotive Production Surge: The automotive production surge refers to the significant increase in the manufacturing of vehicles worldwide. Global light vehicle production in 2023 is reached 89.8 million units, representing a 9.0% increase over 2022 levels. This growth is driven by rising consumer demand for personal vehicles, expanding automotive markets in emerging economies, and advancements in automotive technology, including the shift towards electric and hybrid vehicles.

Infrastructure Development Boom: The infrastructure development boom represents the rapid expansion of construction and infrastructure projects globally, particularly in emerging markets. In 2023, The total globalrequirement forinfrastructure investmentis estimatedat USD 3.9 trillion annually,with the greatest demandsbeing in emerging markets. Governments and private sectors are investing heavily in building roads, bridges, airports, housing, and industrial facilities to support economic growth and urbanization.

Global Synthetic Rubber Market Challenges:

Fluctuating Raw Material Prices Fluctuating raw material prices pose a significant challenge for the synthetic rubber market. Synthetic rubber production relies on key raw materials such as butadiene, styrene, and isoprene. The prices of these materials can be highly volatile due to factors such as geopolitical tensions, supply chain disruptions, and changes in global demand. These fluctuations can impact production costs and profitability for manufacturers.

Environmental Regulations: Environmental regulations present another challenge for the synthetic rubber market. Governments worldwide are increasingly implementing stringent environmental standards to address concerns about pollution, waste, and sustainability. These regulations often require manufacturers to adopt cleaner production processes, reduce emissions, and manage waste more effectively. Compliance with these regulations can involve significant investments in new technologies, process improvements, and waste management systems.

Global Synthetic Rubber Market Government Initiatives:

The Green Chemistry Program: USA launched this initiative to promote the development of sustainable synthetic rubber technologies. The program is managed by the Environmental Protection Agency (EPA), this program supports the development of safer chemicals and processes, including advancements in sustainable synthetic rubber technologies. It provides funding and recognition for innovations that reduce environmental and health impacts.

Horizon Europe: Horizon Europe is the European Unions flagship funding program dedicated to research and innovation. Launched as the successor to Horizon 2020, it represents one of the largest research and innovation initiatives globally, with a budget designed to drive scientific excellence and technological advancement across Europe. One of the key focuses of Horizon Europe is promoting sustainability through the development of advanced materials, including synthetic rubber.

Global Synthetic Rubber Future Market Outlook

The global synthetic rubber market is predicted to grow exceptionally in the forecasted period of 2023-2030 reaching a market size of USD 52 Bn driven by growing Shift Towards Sustainable and Bio-Based Rubbers, increasing Focus on High-Performance Materials, Regional Expansion and Investments, and Enhanced Recycling and Circular Economy Practices.

Shift Towards Sustainable and Bio-Based Rubbers The synthetic rubber market is poised for a transformative shift towards more sustainable and bio-based materials. As environmental concerns and regulatory pressures increase, companies are investing heavily in eco-friendly innovations. For example, Dow is set to showcase its NORDEL REN Ethylene Propylene Diene Terpolymers (EPDM) at the German Rubber Conference (DKT) 2024. This bio-based EPDM rubber represents a significant advancement in sustainable materials, designed for diverse applications including automotive, infrastructure, and consumer products.

Focus on High-Performance Materials The development of high-performance synthetic rubbers is expected to continue evolving, driven by the need for specialized applications that enhance vehicle performance and safety. Future advancements will focus on creating rubbers with low rolling resistance for fuel-efficient tires and high-temperature resistant components for demanding environments. ARLANXEO's range of synthetic rubbers, including S-SBR, HIIR, HNBR, EPDM, and CR, will remain integral to high-performance applications.