Stability on horizon for 39.6 million tonne tire raw material market
Demand for tires is set to return in 2021, with global demand rising to 1.86 billion units according to new detailed market forecasting from Smithers. This is a welcome recovery for the tire industry, after the cumulative effects of the Covid-19 pandemic caused a -10.6% drop in unit sales volumes across 2019-2020.
The new Smithers study, The Future of Tire Raw Materials to 2026 shows how demand for tire raw materials will surge by 12.0% to reach 39.6 million tonnes in 2021.
As stability returns to auto manufacturing and tire plants future, expansion is forecast at a compound annual growth rate (CAGR) of 2.6%. This will see a total of 44.8 million tonnes of natural rubber, synthetic elastomers, steel cord, fillers, textiles, plasticisers and other chemicals, converted into 2.13 billion tires in that year.
Based on an exclusive market survey and incorporating the latest economic, and tire production data, this report identifies there will be significant shifts in demand for tire raw materials over the five-year forecast period
- Sustainability, will accelerate demand for harder-wearing tire compounds, as well as investment in new greener materials. This includes both the use of more recycled content in tires and increased use of alternative bio-based components in tire construction.
Overall this emphasis, now enshrined in a myriad of corporate sustainability commitments, will challenge the industry; both in terms of achieving a consensus on what sustainability in tire manufacturing looks like, and balancing material sourcing concerns against key performance metrics, such as rolling and wear resistance.
- Covid-19 has accelerated the adoption of electric vehicles, which is having a major impact on the entire transportation ecosystem.
Tire manufacturers are responding by prioritising durability, strength and low rolling resistance in materials sets for EV tires, to optimise the range and performance of these heavier vehicles.
- Legislative pressure from regulators is increasingly focused on new standards for reducing the emission of wear particles from tires, again favouring harder rubber compounds.
Simultaneously there is a drive to substitute away from more hazardous chemicals used in tire manufacturing, including, cobalt salts, 6PPD antiozonant, resorcinol-formaldehyde latex (RFL) textiles, and diphenyl guanidine (DPG) in silica preparation.
These changes are happening even as supply chains for many raw materials are still not recovering from the disruption of Covid-19, which has seen price rises and material shortages through the first half of 2021. As stability returns:
- Demand for solution-SBR grades will rise due to their superior rolling resistance, and compatibility with silica fillers in tread compounds
- There will be increased use of polydicyclopentadiene (DCPD) resins in place of less effective, lower-performing terpene resins
- Carbon black demand will remain steady, and be bolstered by the arrival of the first recycled and carbonaceous filler grades, but will still be eclipsed by accelerating use of HDS silica
- The market will increasingly look to Asia, both as the region that has recovered from the pandemic quickest, and one where new ownership and electric vehicle manufacturing are booming
- This will help make two-wheeler tires the fastest growing segment through 2026, as scooters and motorcycles are the most accessible mobility choice for new consumers in India and China.
The Future of Tire Raw Materials to 2026 is a definitive business strategy guide available to purchase now priced $6,500 (€5,250, £4,750) from Smithers.
It combines market-leading analysis of technology and post-Covid demographic and industry trends with an authoritative market dataset. This defines the tire raw materials market through 2026, segmented by regional market, material type and grade, and includes exclusive forecasts on current and future tire consumption by vehicle/tire type.