In recent years, the global supply of natural rubber has faced increasingly severe challenges, with market conditions in 2025 becoming particularly tense. According to the latest data from the Association of Natural Rubber Producing Countries (ANRPC), global natural rubber production in 2025 is expected to grow by only 0.3%, reaching approximately 14.9 million tons. In contrast, global demand is projected to increase by 1.8% to 15.6 million tons. This marks the fifth consecutive year of structural supply shortages.
The sluggish growth in production capacity is mainly attributed to climate change, frequent pest outbreaks, and a decline in investment enthusiasm among major rubber-producing countries. Countries such as Indonesia and Vietnam have seen significant production drops. Although Thailand, one of the world's top producers, has experienced modest growth, it remains insufficient to close the global supply gap. At the same time, declining profitability for rubber farmers has led to the abandonment or crop-switching of many rubber plantations, further eroding potential future supply.
On the demand side, the number of vehicles in emerging markets such as China and India continues to rise, while global replacement demand for automobile tires remains steady. Particularly in new segments such as electric vehicles and lightweight commercial vehicles, demand for high-performance tires-and thus for high-quality natural rubber-is growing rapidly.
This mismatch between supply and demand has directly driven up raw material prices. In the first half of 2025, benchmark natural rubber prices in Southeast Asia rose by over 12%, reaching their highest level in nearly five years. Tire manufacturers are under dual pressure from rising procurement costs and shrinking profit margins. Some small and medium-sized enterprises (SMEs) have even faced cash flow constraints and been forced to cut production. In contrast, larger companies are accelerating investment in synthetic rubber development and strategically securing overseas raw material bases.
To mitigate supply chain risks, many companies are also exploring the use of recycled rubber, sustainable raw material alternatives, and artificial intelligence to optimize procurement forecasting models and inventory management. However, these technologies and solutions are still in the early stages of development and cannot yet fully resolve the pressure caused by raw material shortages in the short term.
In summary, the ongoing shortage of natural rubber is not only reshaping the cost structure of the tire industry but is also compelling the entire supply chain to accelerate its transformation toward greater intelligence, diversification, and sustainability.
