Why is the global rubber market likely to see shortages in 2025?

Natural rubber production is expected to be below demand for the fifth year in a row in 2025. According to the Association of Natural Rubber Producing Countries (ANRPC), global natural rubber production is likely to rise 0.3% in 2025. However, worldwide demand is expected to far outstrip this number, at an estimated 1.8%. 

Rubber is used widely in a number of products such as automotive parts, industrial goods, footwear, conveyor belts, medical equipment and flooring, among several others. The material is prized primarily for its durability, elasticity, water resistance and low maintenance. 

The global rubber market is expected to hit around $65.7 billion (€60.3bn) by 2030, according to a Grand View Research report. 

Two kinds of rubber are mainly traded in global markets. These are synthetic rubber, which is made from natural gas and petrochemical sources, and natural rubber, which is derived from tropical trees. 

Some of the top natural rubber producing countries include Thailand, Indonesia, Vietnam and Malaysia. Other countries such as China, India, the Ivory Coast, Sri Lanka, Cameroon and the Philippines are also major producers. 

Rubber futures dropped around 4% this week, trading at 195 US cents per kilogram on Friday morning, having also fallen 4.8% on a monthly basis. This was the lowest since mid-February, as traders balanced supply concerns with the effects of continuing trade tariffs. 

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