North American rubber prices increased owing to heightened demand from the Asian market in Q4 2023

Natural Rubber Procurement Intelligence

Implementing efficient procurement practices can help companies reduce costs related to sourcing natural rubber. The global market size was estimated at USD 19.73 billion in 2023. The market is driven by rising demand for the category derived from certified sustainable plantations and a shift in consumer preferences toward sustainable products. The increasing applications of this commodity in non-automotive sectors, such as footwear, consumer goods, healthcare, and construction sectors, are also driving the growth.

It is estimated that the total global production of this commodity in 2023 and 2022 was 14.5 million tons each year, compared to 13.8 million tons in 2021. On the other hand, world consumption of rubber (natural and synthetic total) decreased by 2.4% in 2023. In 2023, consumption dropped to 28.8 million tons compared to 29.5 million tons in 2022.

The industry is highly fragmented and competitive. Due to the ease with which buyers can switch suppliers, the latter has limited power to dictate terms or prices. The production and supply chain is dispersed across various regions and countries, especially in parts of Thailand, Indonesia, and Malaysia. The presence of multiple smallholder farmers further contributes to fragmentation. There are more than 6 million smallholder farmers for natural rubbers worldwide. These farmers sell their production to about 100,000 dealers who then forward it to more than 500 factories.

Raw material sourcing, labor, processing (machinery, energy, chemicals and facilities), storage and transportation and others are the major cost elements associated with the production of this commodity. Transportation costs are incurred when raw latex is moved from plantations to processing facilities and finished rubber products are transported to distribution centers or customers. The costs can vary based on the distance traveled, infrastructure, and mode of transportation (rail, road, sea, or air).

In Q4 2023, rubber prices increased in the North American region due to heightened demand from the Asian market. This increase encouraged downstream sectors to spike their prices, particularly in anticipation of the winter season. This, in turn, caused an uptick in domestic inquiries for the product. At the same time, rising raw materials prices have caused a positive outlook for this commodity. Companies actively stocked up their inventories through sufficient order placements, resulting in a robust market. At the end of the last quarter of 2023, natural latex rubber (DRC 60% H.A.) prices reached USD 1,770 /MT in the North American region. Compared to Q3 2023, this was a nominal increase of 0.88%.

The top manufacturing countries are Thailand, Indonesia, Vietnam, India, and China. In 2023, the top three exporters of "technically specified rubber (TSR)" were Malaysia (trade value of USD 775,783K), Belgium (trade value of USD 228,398K), and Ghana (trade value of USD 105,760K). As part of their procurement strategies, companies evaluate suppliers on multiple parameters, such as international standards (ISO and ASTM), sustainability practices, and certifications.

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Natural Rubber Sourcing Intelligence Highlights

• The market is highly fragmented. Most of the fragmentation occurs from these specific regions - Southeast Asia, Africa, and South America.

• The bargaining power of suppliers is low due to the increased fragmentation. In recent years, the category has become increasingly commoditized, with very little differences between products offered by different suppliers.

• The threat of new entrants is low in this industry since the cultivation of natural rubber requires access to suitable lands or plantation zones for harvesting, high capital investment for processing facilities and a network of distribution vendors.

• Thailand, Indonesia, Vietnam, India, and China are some of the ideal countries for procurement. 

Natural Rubber Procurement Intelligence Report Coverage

Grand View Research will cover the following aspects in the report:

• Market Intelligence, along with emerging technology and the regulatory landscape

• Market estimates and forecasts from 2024 to 2030

• Growth opportunities, trends, and driver analysis

• Supply chain analysis, supplier analysis with supplier ranking and positioning matrix, supplier’s recent developments

• Porter’s 5 forces

• Pricing and cost analysis, price trends, commodity price forecasting, cost structures, pricing model analysis, supply and demand analysis

• Engagement and operating models, KPI, and SLA elements

• LCC/BCC analysis and negotiation strategies

• Peer benchmarking and product analysis

• Market report in PDF, Excel, PPT, and online dashboard versions 

Cost Intelligence Highlights

As part of the natural rubber procurement intelligence report, Grand View Research has identified the following total cost components:

• Raw material sourcing

• Labor

• Processing (machinery, energy, chemicals and facilities)

• Storage and transportation

• Others

  • Investments in R&D

  • Compliance and testing

  • Utilities and administrative expenses 

Raw materials sourcing and labor form the largest cost component in the total cost structure. 

Natural Rubber - Key Suppliers 

• Vietnam Rubber Industry Group

• Hevea-Tec (Pirelli & C. S.p.A)

• Thai Hua Rubber Company Limited (Guangdong Guangken Rubber Group)

• Sri Trang Agro-Industry Plc

• Tong Thai Rubber Co., Ltd.

• Kuala Lumpur Kepong Berhad

• Thai Rubber Latex Group Public Company Limited

• Hainan Natural Rubber Industry Group Co., Ltd.

• Feltex Co., Ltd

• Enghuat Industries Limited

• Southland Holding Company

• Von Bundit Co., Ltd.