Rubber market enters a structurally moderate growth phase, IRSG World Rubber Industry Outlook finds

Singapore – The global rubber market is moving into a period of structurally moderate growth as slowing macroeconomic momentum and a maturing automotive sector reshape long-term demand patterns, according to the latest World Rubber Industry Outlook released by the International Rubber Study Group (IRSG).

Rather than cyclical rebounds, future growth is increasingly driven by structural factors, most notably replacement demand in mature vehicle markets and demographic constraints across major economies.

Global vehicles in use are projected to increase by 2.0 percent in 2025 compared with 2024. However, annual growth is expected to ease to an average of 1.62 percent through 2032 as market saturation and aging populations weigh on expansion. Global vehicle production is forecast to grow by 3.1 percent in 2025, before moderating to an average rate of 1.13 percent per year over the medium term.

Tire production reflects this softer trajectory. Output is projected to rise by just 0.24 percent in 2025, followed by a modest average annual growth of 1.46 percent through 2032, underscoring the shift toward replacement-led demand rather than capacity expansion.

Against this backdrop, total rubber demand is expected to increase by 2.1 percent in 2025, with a compound annual growth rate of 1.75 percent through 2032. Natural rubber demand is projected to grow by 2.0 percent in 2025, easing to a CAGR of 1.61 percent over the outlook period. Synthetic rubber follows a similar path, rising by 2.1 percent in 2025 and expanding at a CAGR of 1.36 percent through 2032.

On the supply side, global natural rubber production is forecast to recover, increasing by 3.5 percent in 2025 compared with 2024. Despite this improvement, supply growth remains insufficient to fully meet rising demand. Global natural rubber production is projected to reach 17.10 million tonnes by 2032, yet the market is expected to remain structurally tight.

The global natural rubber balance is forecast to post a deficit of 488 thousand tonnes in 2025, narrowing from an estimated 689 thousand tonnes in 2024. However, the deficit is expected to widen again over the medium term, reaching 779 thousand tonnes by 2032 as supply expansion continues to lag demand growth.

The IRSG outlook highlights a rubber market entering a more stable but constrained phase, where long-term fundamentals, rather than short-term cycles, will increasingly define industry performance.