The global rubber market is projected to face an annual supply deficit of 600,000–800,000 tons through 2028, as demand outpaces production amid rising tire manufacturing and strong Chinese consumption.
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(CSVNO) – The global rubber market, valued at USD 46.61 billion in 2024, is confronting one of its most severe supply shortages in years as production continues to fall short of soaring demand. In February 2025, rubber prices surged to a record 215 U.S. cents per kilogram, underscoring the imbalance that has persisted for five consecutive years.
According to market forecasts, global production is expected to rise by only 0.3% to 14.9 million tons, while demandis projected to grow 1.8% to 15.6 million tons in 2025. Analysts estimate the market will continue to run a deficit of 600,000–800,000 tons annually until 2028, maintaining upward pressure on prices.
Persistent Global Supply Gap
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A widening gap between supply and consumption has alarmed industry observers. The Association of Natural Rubber Producing Countries (ANRPC) reported that global consumption exceeded production by 1.16 million tons in 2024, equivalent to 4.7% of total market volume. This shortfall has driven rubber prices sharply higher across international exchanges.
China Dominates Global Consumption
China remains the largest consumer of natural rubber, accounting for 43% of global demand. Its consumption shows no signs of slowing, averaging 500,000 tons per month.
In January 2025 alone, China purchased 79% of Vietnam’s total rubber exports, contributing to 78% of Vietnam’s export revenue from rubber during the same period. This overwhelming dependence underscores China’s influence on global pricing and trade dynamics.
Production Weakness Among Top Producers
Production data reveals a concerning trend among major rubber-producing nations:
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Indonesia, the world’s second-largest producer, is expected to see output fall 9.8% to 2.04 million tons in 2025.
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Vietnam forecasts a 1.3% decline to 1.28 million tons.
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Thailand, the global leader, anticipates only a modest 1.2% increase, insufficient to offset losses from neighboring producers.
Collectively, these shortfalls point to a structural supply constraint, as unfavorable weather, aging trees, and labor shortages hinder productivity in key regions.
Automotive Sector Drives Demand
The automotive industry remains the dominant driver of rubber consumption, using 34% of global supply. Tire manufacturing continues to be the largest end-use segment, and demand is set to intensify as China and India anticipate growth of 2.5% and 3.4%, respectively, in 2025.
This sustained expansion in the mobility sector ensures continued demand for both natural and synthetic rubber, tightening supply even further.
Outlook: Tight Market Through 2028
Experts from the ANRPC warn that the global rubber shortage will likely persist through 2028, with an annual shortfall ranging between 600,000 and 800,000 tons.
China’s proactive monetary and fiscal policies, alongside increased investments in tire manufacturing, are expected to sustain steady demand growth throughout the medium term.
As a result, the market is poised to remain tight, with prices elevated amid limited production growth and robust consumption across Asia’s industrial powerhouses.