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   IndiaRubberDirectory.com > Rubber Article > Rubber Statistics

RUBBER CONSUMPTION IN
AUTOMOBILES.



-BY DR. RASHID MASOOD-ECONOMIST

WORLD RUBBER INDUSTRY SCENARIO



The production of synthetic rubber was started in the Western countries such as the US, the UK, Germany, Canada, France, Italy and Latin American countries like Brazil and Mexico. Later, it was produced in the Southeast Asian countries viz., Japan, China, South Korea and Taiwan.

In the beginning a few types of synthetic rubbers (SR), mainly general-purpose rubber, e.g., SBR was produced. Subsequently PBR and then buty1 rubber and thereafter, polyisoprene rubber were produced. The intensive R&D activities led to the production of specialty Rubber, such as neoprene, Nitrile, Silicone, VP Latex, etc.

Natural Rubber (NR)

The production of NR in the world increased from 3.850 million tons in 1980 to 50140 million tons in 1990 and was estimated at 7.13 million tons in 2001. In terms of percentage change, production of NR in the world increased from a negative growth of 0.81% in 2001 to 5.47% in 2002. Estimates of NR and SR production during the period, 2000, 2001 and the MAT to October 2002 for all producing countries in the world are shown in Table 1.

 

TABLE 1
WORLD RUBBER PRODUCTION

  Production  Percentage
Change in growth
  2000 2001 2002@ 2001 2002
NR 6760 7130 7072 -0.81 5.47
SR 10870 10499 10652 -3.50 1.54
New Rubber 17630 17620 17724 -0.057 0.59
Share of SR in new Rubber (%) 61.66
 
59.53 60.10 - -


@-Moving Annual total to October 2002

On the other hand, SR production in the world increased marginally from 1.05 million tons in 1997 to 10.12 million in 1998 and was expected to rise to 10.652 million tons in 2002. In terms of percentage change in growth, SR production in the world increased from a negative growth of 3.5% in 2001 to 1.54% in 2002.

Total production of NR and SR in the world increased from a negative growth of 0.06% in 2001 to 0.59% in 2002.

The share of SR in total production of new rubber in the world was 59.53% in 2001 that marginally increased to 60.10% in 2002.

The growth rates in production of new rubber in the world were higher than those of the consumption in 2001 and 2002

The consumption of synthetic rubber in the world was higher than that of the natural rubber during the period, 2000-2002. The share of SR in total consumption of new rubber was 59.2% in 2002.

 

TABLE 2
WORLD RUBBER CONSUMPTION

 

  Consumption  Change in growth rates (%)
  2000 2001 2002@ 2001 2002
NR 7340 7070 7223 -3.68 2.16
SR 10830 10340 10489 -4.52 1.44
New Rubber 18170 10340 10489 -4.18 1.73
Share of SR in new Rubber (%) 59.6
 
59.4 59.2 - -


@Moving Annual Total to October 2002.

The consumption of natural rubber in the world declined by 3.68% to 7.07 million tons in 2001 from 7.340 million tons in 2000 but afterwards, growth in consumption rose as it was estimated to increase by 2.16% to 7.223 million tons in 2002.

Similarly, consumption of synthetic rubber in the world fell marginally by 4.52% to 10.340 million tons in 2000 but it rose to by 1.44% to 10-489 million tons in 2002.

Thus, the total consumption of NR and SR in the world decreased by 4.18% to 17.410 million tons in 2001 from 18.170 million tons in 2000 and then marginally increased by 1.73% to 17.712 million tons in 2002.

The growth of rubber (NR & SR) in the developed world has now reached to almost a saturation point whereas there are buoyant growth areas for production as well as consumption of new rubber in the developing world. The total new rubber (NR and SR) produced in Asia was estimated at 10.828 million tons in 2003. Table 3 shows the production and consumption of NR and SR in Asia during the period 2003.

In south East Asia, the production and consumption of rubber (NR and SR) are significantly high. In the region, India and China both have very big captive markets for consumption of rubber products. Apart, other countries in the region like China, Japan, South Korea and India consume significant quantities of rubber in their domestic markets.

The total production of NR and SR in the South-East Asia was 10.197 million tones or 94.17%of the Asia total in 2003.

The total production of NR in the Southeast Asia was 6.006. Million tons in 2003 or 90.49% of the Asia total Thailand accounted for 37.25% and Indonesia 27.59% of NR production of the Asia total. The major NR producers in the region were Thailand (2.472 million tonnes) Indonesia (1.831 million tonnes), Malaysia (0.596 million tonnes), India (0.639 million tonnes) and China (0.468 million tonnes).

 

TABLE 3
PRODUCTION AND CONSUMPTION OF
NR AND SR IN ASIA (2003)

 

  Production Consumption
Country NR  
     



None: * -estimate
(Source: CAN/28 April-4 May 2003/p.24).

The total production of SR in the Asia was 40191 million tonnes in 2003, total production of SR in Japan was 1.515 million tonnes or 36.15% of the Asia total and that in China was 1.186 million tonnes or 28.30% of the Asia total. The major SR producers in the region were Japan (1.595,000), Korea (678,100 tonnes), Taiwan (557,000 tonnes) and China (1,186,000).

The highest production of NR in the Southeast Asia region (except Japan) was in Thailand (2,427 million tonnes while lowest production was in China (468,000 tonnes) in 2003. On the other hand, the highest production of SR in the region (except Japan) was in China (1,186,000 tonnes) whereas the lowest production was in Indonesia (49,000 tonnes) in 2003.

In the Southeast Asia, consumption of NR was 3.949 million tonnes and that of SR
was 4.102 million tonnes in 2003. The total consumption of NR and SR in region was 8.051 million tonnes, accounting to 95.1% of the total consumption in Asia in 2003.

In the South-East Asia, share of production of SR in total (NR+SR)rubber production was 38.71% in 2003.

In the Southeast Asia, consumption of SR was 50.95% of the total consumption of rubber (NR+SR) in 2003. The highest consumption of NR in the region (except Japan) was in China (1,340,000 tonnes) while the lowest consumption of NR in the region was in Taiwan (1,113,000 tonnes) in 2003. Similarly, the highest consumption of SR in the region (except Japan) was again in China (1.795 million tonnes) whereas the lowest consumption was in Indonesia (1,116,000 tonnes) in 2003.

There was no production of SR in some of the South East Asian countries like Guinea, Myanmar, Singapore, Sri Lanka, etc. in 2003.

Trends of global tyre production may analysed on the basis of the region's major producers viz., US, Brazil, Europe and Asia. The major tyre producers in Europe are France, Germany and Italy whereas those in Asia are Japan, Korea and India.

According to an estimate, the last two years of the last millennium were best years for the tyre and automobile industries. The worldwide recession in 2001 caused a shutdown of 12.127 million units of tyre industry in comparison to 2000. A fall of 2.1% (YOY). The major impact was on the US which had lost 8.475 million units, registering 3.8% drop. Europe was the only region which registered a positive growth, recording production of 141.203 million units, a rise of 0.3% (YoY)

 

TABLE 4
CARTYRE PRODUCTION BY REGION

 

Year US Brazil Europe Asia Total
1996 210,329 25,916 126,383 155,611 518,239
1997 216,236 26,469 133,328 161,461 537,495
1999 214,714 26,190 138,078 173,513 552,495
2000 223,003 27,955 140,804 181,248 573,011
2001Q1 52,838 7,204 38,555 43,654 142,071
2001Q2 58,506 6,283 36,487 45,693 146,968
2001Q3 52,078 6,426 32,201 45,207 135,912
2001Q4 51,106 5,278 33,961 45,588 135,932
2002Q5 50,877 6,054 37,536 45,180 139,647
2002Q6 52,296 6,799 N.A N.A 59,095


Source: Rubber Industry Report, October 2002, P. 27

The industry was expected to emerge from the global recession in 2002 but Q1 figures show that the negative momentum built up in 2001 had been carried over into 2002 as production was down by 2424 million units, registering a fall of 1.7% (YoY). With the rise in automobile sector, Asia (Comprising of Japan, Korea and India) was the only region that showed a positive growth in Q1 2002 with production of 45.18 million tyre units, a rise of 3.5% (YoY). The total tyre production was 139.647 units in Q1 2002.

Commercial Vehicles (CV) Production

The recession that had hit production of car tyres in 2001 was replicated in the commercial vehicle (CV) tyres as well. The production of CV tyres, was 153.301 million units in 2000 which fell to 138.90 million units in 2001, a loss of 14.401 million units representing a drop of 9.39% (YoY). The major impact of the fall was on the US CV tyre industry, where production of CV tyres declined by 1.8% with a loss of 10.081 million units.

 

TABLE 5
CV TYRE PRODUCTION BY REGION



Year US Brazil Europe Asia Total
1996 45,394 7,318 14,808 69,673 137,193
1997 47,624 7,371 16,953 69,066 141,015
1999 52,938 8,172 21,047 68,851 151,008
2000 53,938 9,430 21,118 68,992 153,301
2001Q1 12,529 2,323 5,567 15,492 35,911
2001Q2 10,586 2,441 4,923 16,541 34,491
2001Q3 10,288 2,459 4,784 16,668 34,199
2001Q4 10,278 2,145 4,852 17,024 34,299
2002Q5 12,060 2,536 5,225 15,314 35,134
2002Q6 12,066 2,595 N.A N.A 14,661


Source: Rubber industry Report, October 2002, P.27

Unlike the passenger car tyre sector, minimum impact of the recession was on Brazil where CV tyre production dropped by 0.66% in 2001. On the other hand, CV tyre production declined by 0.992 million units and 3.267 million units in Europe and Asia respectively, 4.7% fall for both the regions.

Total production of CV tyres declined by 2.16% to 35.134 million units in Q1 2002 from 35.911 Million units in Q1 2001. Brazil performed best with 9.2% growth in Q1 2002.

INDIAN RUBBER INDUSTRY

Rubber industry was established in India in the 1920s but its growth was moderate in the pre-plan period and showed a phenomenal increase during the post-plan period. The industry manufactures a wide range of products from rubber erasers to rubber tyres.

Total area under rubber cultivation is nearly 5.67 lakh hectares About 97% of its demand is met by indigenous production. Kerala, Tamil Naidu and Karnataka are the traditional areas for natural Rubber production and the non-traditional areas are Andaman & Nicobar Islands, Meghalaya, Tripura, Mizoram, Nagaland, Mainpur, Assam, etc. Kerala produces 97% of natural rubber and around 85% of the area is under rubber cultivation.

The gross area (tapped area) under rubber plantation has increased from, 0.1 million hectares 1960-61 to 0.6 million hectares in 2001-02. The yields of natural rubber have continuously increased country during the last one decade.

The trends in Yields of Natural rubber in India during the period 1990-91 to 2002-03 are given Table 6.



TABLE 6
YIELDS OF NATURAL RUBBER IN INDIA
1990-91 TO 2002-03

Year Yield
1990-91 1076
1995-96 1422
2000-01 1576
2001-02 1576
2001-03 1580


*Estimated
Source: Indian Economic Survey 2002-03,
(Delhi), Table 8.9, P. 160

The yield of natural rubber has increased from 354 kg/hectares in 1960-61 to an estimated 1580 kg/hectares in 2002-03. (Economic Survey, 2002-03, Table 8.9, p. 160).

The production of natural rubber has increased from a modest growth of 15,830 tonnes in 1950-51 to 3.30 lakh tonnes in 1990-91 and further to 649,435 MT in 2002-03.


The consumption of NR has also increased from 364,000 tonnes in 1990-91 to 695,425 tonnes in 2002-03. The growth rate of production of NR increased marginally from 0.16% in 2001-02 to 2.86% in 2002-03 whereas that of consumption increased significantly from 1.07% in 2001-02 to 8.96% in 2002-03.


According to All India Rubber Industries Association estimates, total supply of NR will be around 903,000 MT and consumption will be to the tune of 936,000 MT in 2003-04, a deficit of 33,000 MT.

Table 7 shows the trends in production and consumption of NR in the country during the period, 1990-91 to 2002-03.

 

TABLE 7
PRODUCTION AND CONSUMPTION OF NATURAL
RUBBER IN INDIA DURING THE
PERIOD: 1990-91 to 2002-03.

 

Year production imports Exports Consumption
1990-91 329.615 N.A nill 364.310
1991-92 366,745 15,070 nill 380,150
1992-93 393,490 17,630 nill 414,105
1993-94 435,160 18,900 nill 450,480
1994-95 471,815 8,531 nill 485,850
Annual
Growth from
1990-91 to
1994-95 (%)
9.38      7.46
1995-96 506,910 51,635 nill 525,465
1996-97 549,425 19,770 nill 561,765
1997-98 583,830 32,070 nill 571,820
1998-99 605,045 26,307 nill 591,545
1999-2000 622,265 20,207 nill 628,110
Annual
Growth from
1995-96 to
1999-2000 (%)
5.26      4.56
2000-01 630,405 8,572 nill 631,475
2001-02 631,400 49,590 nill 638,210
2002-03 649,435 26,229 nill 695,425

Source: All India Rubber Industries Association, 51st Annual Report,
2002-03, Tables 1, 4 and 5

Table 7 shows that production of NR registered a compound annual growth rate of 9.38% during the period, 1990-91 to 1994-95 while the consumption grew at a lower rate of 7.46% per annum during the same period.

Likewise, the production of NR recorded the compound annual growth rate of 5026% during the period, 1995-96 to 1999-2000 whereas the consumption grew at a lower rate of 4.56% per annum during the corresponding period.

The consumption of NR was higher than the production in 2002-03. The consumption of NR increased at the growth rate of 8.96% during the year, 2002-03 over previous while production of NR increased at a lower rate of 2.86% during the same period. The rise in production of NR caused a sharp fall in its imports by 47.11% to 26,229 MT in 2002-03 from 49,590 MT in 2001-02.

Synthetic Rubber
Though India has a strong base for natural rubber (NR), its production could not keep pace with the growing demand for rubber in the domestic market. To meet the ever growing demand and supply deficits of natural rubber, emphasis was laid on the production of synthetic rubber in the country.

There are several types of synthetic rubber that can broadly be classed into two major groups:

1. The General Purpose Synthetic Rubber, such as SBR, PBR, EPDM; and
2. Special purpose synthetic rubber like buty1 rubber (IIR), chiloroprene rubber (CR), nitrile rubber (NBR) acrylic rubber, polyester elastomers, cyclopentene rubber, ethylene copolymers, silicon polymers, fluorinated elastomers, urethane Rubber, etc.

Apar Limited, establish in 1958, was the first to install a synthetic rubber unit with 10,000 t/y capacity for manufacturing SBR. Gujarat Apar Polymers Limited (GAPL) was promoted in 1989 by Apar Limited to manufacture acrylonitrile butadiene rubber (NBR) with an initial capacity of 5,000 t/y.

In the second Five Year Plan (1956-57 to 1960-61), the development of synthetic rubber was reserved for public sector undertakings but it did not grow to the desired level as the petrochemical industry was not much developed at that time. In the Third Five Year plan (1961-62 to 1965-66), it was opened for the private sector as well.

Synthetics and Chemicals Limited established three units at Barely in UP in 1963. First, to manufacture butadiene from alcohol; second, to manufacture styrene from benzene; and third, to manufacture SBR from polymerization of butadiene and styrene. It produced about 8,000 tons of SBR in 1963. However, capacity utilization was low and SBR prices were high due to which SR could not get a competitive edge over natural rubber (NR).

The first public sector undertaking viz., Indian petrochemicals Corporation Limited (IPCL) installed a PBR plant with 20,000 t/y capacity in 1978.

Later, a few other rubber plants were installed to produce different types of rubber in the country, such as:

Polyolefins Industries Limited, which was merged with NOCIL in November 1994, had set up a rubber plant to produce EVA with 6,000 t/y capacity in 1989;
Herdillia Unimers Ltd., set up the synthetic rubber plant to produce EPDM Rubber with a 10,000 t/y capacity in 1993;
Asian cables Ltd., or Apcotex established a synthetic rubber plant to produce VP Latex (Viny1 Pyridine Latex); and
Anabond Silicones (Madras) and Reliance Silicones both have set up plants for silicone rubber.

SBR and Nitrile rubber including high styrene resins are manufactured by Synthetic and Chemical Ltd. And Gujarat Apar Polymers Ltd. Besides SBR and PBR, other rubber, such as EPDM, VP, Latex, EVA rubber and Thermo- Plastic rubber have also been produced in the country. In addition, buty1 rubber for engineering applications and specialty latex, tyre rubber for auto tyre industry and specifications for automobile parts are planned to be manufactured.


The consumption of synthetic rubber increased continuously from 122,710 MT in 1994-95 to 194,850 MT in 2002-03, except for the year 1998-99.

The production of synthetic rubber increased from 63,681 MT in 1994-95 to 68,223 MT in 1995-96 and then after decline to 64,563 MT in 1996-97, it again rose 71,993 MT in 1997-98 and the next year it dropped to 67,590 MT in 1998-99 and further declined to 60,293 MT 1999-2000. It increased continuously from 65,460 MT in 2000-01 to 80,401 MT in 2002-03.

The gap between supply and demand of synthetic rubber have been bridged with imports. The imports of synthetic rubber increased when there was a decrease in production and voiceovers. The imports of SR decreased from 73,860 MT in 1994-95 to 71,735 MT in 1995-96 and then increased to 91,050 MT in 1996-97 and thereafter, decreased continuously in the next two years to 78,175 in 1998-99 but again started rising and reached to the level of 124,475 MT in 2002-03.

The exports of synthetic rubber have also shown a growing trend but only a small quantity of their exports have been made during the period. The exports of synthetic rubber decreased from 1,810, MT in 1994-95 to 1,240 MT in 1995-96 and then rose to 1,540 MT in 1996-97 and thereafter, it declined to 1,020 in 1997-98 and then again rose to 2,820 MT in 1998-99.

The consumption of synthetic rubber in the domestic market was substantially higher than the production and therefore, the demand and supply deficits of SR were bridged with imports to satisfy the growing domestic demand for rubber products. The share in imports of synthetic rubber in total consumption was 26.83% in 2002-03.

New Rubber (NR+SR)

India, China and Brazil produce NR as well as SR and also consume large quantities of rubber.
India is a major natural rubber growing country Malaysia, Indonesia, Thailand, China, Vietnam, Sri Lanka, Myanmar, etc. all are the major natural rubber growing countries in southeast Asia. Except India and China, all other countries earn large proportion of their foreign exchange revenues from exports of NR.

Brazil produces SR in excess of its domestic consumption and exports surplus SR India and China produce SR less than the domestic demand and hence, they depend on imports of SR.

In India, consumption of NR was 79% of the total new rubber (NR and SR) and that of SR was 21% of the total.



TABLE 8
TRENDS IN CONSUMPTION OF NEW RUBBER IN INDIA

Year Natural rubber Synthetic rubber New rubber Growth over previous year Reclaimed rubber
1994-95 485,850 122,710 608,560 7.92 64,695
1995-96 525,465 134,085 659,550 8.38 65,775
1996-97 561,765 142,810 704,575 6.83 66,585
1997-98 571,820 160,915 732,735 4.00 70,085
1998-99 591,545 156,355 747,940 2.08 63,095
1999-00 628,110 167,220 795,330 6.34 63,450
2000-01 631,475 170,670 802,145 0.86 62,260
2001-02 638,210 174,530 812,740 1.32 63,875
2002-03 695,425 194,850 890,275 9.54 67,320

new rubber (excluding reclaim rubber) in 1999-2000. The trends in consumption
of new rubber (NR and SR) during the period, 1994-95 to 1999-2000 are given in Table 8.

Table 8 shows that consumption of NR increased from 485,850 MT in 1994-95 to 695,425 MT in 2002-03 and that of SR increased from 122,710 MT in 1994-95 to 167,2201.32% in 2002-03.

The consumption of new rubber (NR and SR) increased from 608,560MT in 1994-95 to9 890,275 MT in 2002-03. The consumption of new rubber increased from 1.32% in 2001-02 to 9.54% 2002-03.

Reclaimed Rubber

There are tow major types of rubber viz., NR and SR. Another type of rubber is reclaimed rubber. The short supply of rubber has led to the recovery and reused of scrap rubber and development of reclaim rubber industry.

Indian manufacturers recycled rubber in the form of reclaim rubber and crumb rubber. Reclaim rubber industry in the country was established in 1960. The first reclaim rubber plant became operational near Bombay with a capacity of 6,000 t/y in 1963.

About 33% of reclaim rubber is used in bicycle tyres and the rest in battery containers, footwear, etc. Total consumption of reclaim rubber was 67,320 MT in 2002-03.

APPLICATIONS OF RUBBER

Natural Rubber constitutes 80% and synthetic rubber only 20% of the material contents in tyres in India. In the world, ratio of natural rubber to synthetic rubber is 30:70. In addition, rubber chemicals are also widely used in tyres.

Most of the RSS-4 grade natural required in the domestic tyre industry is produced in the country and only a marginal quantity is imported. This is an advantage for the tyre industry as natural rubber concludes 25% of the total cost of the raw material used for the manufacturing tyres.

The synthetic rubber used in tyres are SBR and PBR. While PBR is used in most of the tyres, SBR is used in radial tyres for passenger cars. Synthetic rubber accounts for 14% of the raw-material cost. Unlike natural rubber, India imports about 60% of the synthetic rubber to meet its demand.

Besides, Nylon tyre cord (NTC) is used to makes the tyres strong and imports tenacity to it. Carbon black is used for the colour of the tyre and also it enhances 34% of the raw-material cost. Carbon black used in the country are of the N660, N220 and N330 variety.

The raw-material costs for manufacturing a tyre account for 70% of the cost of its production. The export and import policy allows tyre import of all tyres of new tyres and tubes. Though import of all tyres of new tyres and tubes. Though imports of tyres and nonmaterial for tyres except natural rubber and under OGL, only import of natural rubber from Sri Lanka is allowed under OGL.

Cross ply tyres are used in the country for several decades. The ply cards run across each other or diagonally to the outer surface of the tyres. Rayon and nylon tyre cords are used as the reinforcing medium. These tyres can be retreated twice during the lifetime and are hence, preferred by transporters due to bad road conditions.

In radial tyres, cords run bead at 90 degrees angle to the rim or along the outer surface of the tyres are polyester, nylon, fiberglass and steel. Hence, these tyres are more expensive as compared to the crossplies but the country, radial tyre account for only 5% of the total tyre consumption as against 60% used in the world.

PRODUCTION OF VEHICLES

The rubber goods manufacturing industry has grown significantly. There has been a phenomenal growth in the consumption of synthetic rubber depends on a number of factors that may influence the development of the industrial sectors where these products are used. The maximum consumption of rubber in India is in the automobile industry for manufacturing heavy and light commercial vehicles, cars, three wheelers and two wheelers. The development of automobile industry and its production scales for commercial and non-commercial vehicles generate demand for synthetic tyre and other transport related rubber goods.

The automobile industry comprises mainly three segments viz, two and three wheelers, cars and utility vehicles and commercial vehicles.

During the last one decade, Indian automobile industry has witnessed significant changes. Many global automobile companies were averse to invest in India in the 1980s, but now have priority destination for their investment. The stiff competition to access market prompted the domestic automobile companies for an structured change by manufacturing different models with high quality at low prices. Several financial institutions provided soft financial assistance that expanded the market at a rapid face.

Two and Three wheelers

Prior 1990, the two wheeler industry was mainly manufacturing metal body geared scooters and the number of producer were less than five. With the introduction of lighter 100cc motorcycles, consumers have changed their performance from scooters to motorcycles. Now is the second largest manufacturer of two wheelers in the world. In 2000-01, the sale of motorcycles was more than 48% while the sale of scooters have receded. Due to this shift in demand, Bajaj Auto, LML and TVS have given more stress to the manufacture of motorcycles.

Passenger Car Industry

In the pre-reforms period, protectionist policy of the Government did not allow foreign companies to set up their establishments in the country. This has adversely affected the technological upgradation of the domestic car industry. After the economic reforms of 1991, several global automobile companies have set up their plants and started production. The car segment is now flooded with new models. The production capacity and sales of cars have gone up substantially.

The production of motor vehicles in the country increased significantly from 3,504, 358 in 1995-96 to 6,304,558 in 2002-03. According to Society of Indian Automobile Manufacturers (SIAM), production of cars rose by 11.48% to 557,709 units while that of motorcycles rose by 34.69% to 3.9 million units in 2002-03.

Table 9 shows that there was a tremendous growth in all types of motor vehicles which include two wheelers, three wheelers, four wheelers, passenger and commercials vehicles during the period 1995-96 to 2002-03. Thus, development of transport sector has generated a tremendous demand for rubber goods, such as autotyres and tubes which account for bulk of rubber consumption.


 

   

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