On the occasion of Lunar New Year 2024 (Year of the Dragon), Mr. Trần Thanh Phụng – Deputy General Director of the Vietnam Rubber Group (VRG) – shared with Vietnam Rubber Magazine insights on the Group’s rubber sales performance in 2023, market outlook for 2024, and strategic directions for the coming years.
2023: A Challenging Year with Strategic Adaptation
According to Mr. Phụng, 2023 was an exceptionally difficult year for the global rubber industry, as markets were heavily influenced by non-fundamental factors such as inflation, recession fears, a strong U.S. dollar, and geopolitical instability. Despite these headwinds, VRG managed to maintain stable operations and flexible sales strategies.
While the global economic outlook remained subdued, favorable fundamentals—including balanced supply-demand conditions and high oil prices—helped provide some support to the rubber market.
Throughout 2023, even as rubber prices dropped sharply between March and August, VRG’s member companies were able to adapt effectively, thanks to timely market forecasting and flexible pricing adjustments. The Group emphasized continuous analysis and scenario-based forecasting, enabling managers to respond quickly to market volatility.
As a result, VRG sold over 520,000 tons of rubber in 2023, exceeding its plan by 2%, while maintaining inventory levels below the multi-year average—a key achievement amid declining global demand. However, due to falling natural rubber prices, VRG’s average selling price reached only VND 30.5 million per ton, down 15.9% compared to 2022.
2024 Market Outlook: Uncertain but with Potential Upside
Looking ahead to 2024, Mr. Phụng noted that global geopolitical tensions will likely continue to affect commodity markets, including rubber. Institutions such as S&P Global Market Intelligence and Fitch Ratings forecast global GDP growth at 2.1–2.3%, down from 2.7–2.9% in 2023, reflecting slower growth in the U.S. and Europe, while Asia-Pacific remains the main driver.
From a fundamental perspective, global rubber production in 2024 is projected to reach 14.941 million tons, up 4.2%from 2023, while consumption is expected to hit 15.528 million tons, up 4.1%. This means demand will continue to outpace supply, supporting a moderate recovery in rubber prices.
High oil prices are also expected to sustain cost pressure on synthetic rubber, indirectly boosting demand for natural rubber. Consequently, rubber prices in Q1–Q2 2024 may rebound due to limited supply, before stabilizing in the second half of the year depending on macroeconomic developments.
Strengthening Market Resilience and Domestic Demand
In response to continued challenges—rising shipping costs, insurance rates, and container shortages—VRG plans to enhance domestic consumption by expanding sales to Vietnamese tire manufacturers such as Casumina, Da Nang Rubber, and Viet Tire, while maintaining cooperation with foreign-invested factories like Kumho, Cheng Shin, Sailun, Yingyu, and the upcoming Haohoa tire plant.
VRG will also continue to focus on its core sustainable development pillars:
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Strengthening quality management and product diversification;
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Enhancing productivity and cost efficiency;
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Expanding PEFC-certified plantation areas and maintaining FSC recertification;
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Participating in the carbon credit market as part of its long-term sustainability strategy.
Mr. Phụng emphasized that information-driven adaptability—the ability to receive, analyze, and act upon accurate market data—will remain the most critical factor in ensuring stability and competitiveness for VRG and its member companies amid a complex and volatile global market.