Asia Pacific sustains key role

There is no doubt that 2015 will become a banner year for Asia Pacific rubber industry. Global rubber consumption is expected to grow by as much as 4.3% annually from 2015 to 30.5 million metric tonnes. The study by Freedonia Group attributes the growth to increased in tyre output due to the rise in global motor vehicle production which has recovered from the 2005-2010 sluggish performance. Since tyres represent the largest market for rubber, strong increases
in the number of motor vehicles in use throughout the world will in turn result in the upsurge in the amount of rubber consumed worldwide.

Aside from tyres, rubber is also needed in the production of automotive parts and components. Asia Pacific is by far the largest regional market for rubber and is likely to post the fastest growth in rubber consumption through 2015. The massive Chinese rubber market, which alone accounted for nearly one-third of global rubber demand, is expected to record substantial gains in 2015.

The World Rubber Industry Outlook presents long-term projections for the next 10 years on the tyre and rubber sectors. World total rubber demand is forecast to increase at an accelerating rate of 4.4% in 2015, to post long-term growth of 3.7% under the IMF Scenario to 29.2 million MT by 2015. The world total natural rubber consumption is projected to reach 12.4 million MT in 2015 and rising further to reach 17 million MT by 2023. In the same manner, synthetic rubber demand is estimated to hit 16.8 million MT in 2015 under the IMF Scenario. By 2023, the demand for sythentic rubber will climb to 22 million MT.

Aside from the automotive industry, fast growing sectors that are expected to provide high demand for rubber in the Asia Pacific region are infrastructure/building and construction, medical, electronics and electrical, as well as other consumer products (sporting goods , etc.). In particular, the market for silicones remains robust as silicones are needed in most industrial sectors. Global sales of silicones was valued at about $15 billion in 2013, with projection of at least 5% growth in the next three years. Ceresana, in its report on the global silicones market, expects high growth rates for the electronics and electrical sector due to the use of silicones in such products as keyboards, computers,
telephones and several other products, especially those where insulation and safety are of foremost importance.

The high production of motorcycle and bicycle production in the country supports strong demand for rubber utilised in nonmotor vehicle tyres. China also represents the largest national market for rubber used in motor vehicle tyres. The rubber markets in Western Europeand North America will continue to see gains below the global average, although both regions will rebound somewhat from the sales declines seen in the past few years.

Tyre as biggest rubber segment

Tyre rubber, which accounted for more than two-thirds of all rubber demand in 2010, is expected to remain the larger market segment. Rubber utilised in motor vehicle tyres will be the strongest growth area although rubber utilised in non-tyre applications will grow faster in 2015.

Strong demand met by stable supply

The rubber industry in the Asia Pacific region will benefit from the new production facilities that will come on stream after 2015. For one, BASF has announced plans to boost output of tertiary Butylamine (tBA) by 60% at its manufacturing facility located at the Nanjing Chemical Industry Park, China. With this project, the complex will produce 16,000t of tBA each year, compared with its current 10,000t capacity. BASF Asia Pacific intermediates senior vice-president Guido Voit said: “The expansion will enable us to continue meeting the notably increased demand of our customers in Asia, especially China, reliably out of our local assets in said Neil Chapman, senior vice president, ExxonMobil Chemical Company. He added that ExxonMobil's Singapore Chemical Plant is the optimal base for serving the fast growing market in Asia with advantaged feedstock, economies of scale, and excellent logistics.

The company is a major supplier of halobutyl rubber to the global tyre industry, and the expansion project will add production capacity of 140,000 tonnes per year. The hydrogenated hydrocarbon resin production unit will be the world's largest, with a capacity of 90,000 tonnes per year, to meet long-term demand growth for hotmelt adhesives.