By P Venugopal:
Increasing applications of reclaim rubber in various end-use industries, growing preference for reclaim rubber over synthetic rubber due to fluctuating oil prices, stringent government regulations to promote recyclable material usage etc. are driving the growth of global reclaim rubber market. However, emergence of innovative elastomer-based products, increasing radialisation, advent of tubeless tyres, fluctuating crude oil prices etc. are posing a threat to the industry.
Reclaim rubber is widely recognised as the third source of rubber after natural rubber and synthetic rubber. According to experts, reclaimed rubber use is expected to grow slightly faster than that of natural rubber and synthetic rubber in the future, thanks to its increasing applications in various end-use industries, unique properties such as excellent versatility and durability, easy availability of raw material, reduced processing costs, and little negative impact on the environment.
The increasing use of reclaim rubber in various industrial applications such as automotive and aircraft tyres, footwear, cycle tyres, molded rubber goods, belts and hoses, retreading etc. has given a fillip to the global reclaim rubber industry.
The demand for reclaim rubber is also growing in other sectors such as construction, household, electronics, packaging etc. Moreover, increasing use of reclaimed rubber over synthetic rubber due to fluctuating oil prices is fuelling the product demand.
Stringent government regulations to promote recyclable material usage to check environmental pollution and to reduce the number of landfills in regions like Europe and North America is another stimulant for the growth of the reclaim rubber market. Additionally, the easy availability of waste tyres and low cost of reclaim rubber have further contributed to market growth in recent years.
However, the reclaim rubber industry is confronted with some challenges too. The emergence of innovative elastomer-based products is expected to hamper the reclaim rubber market growth in near future.
The increasing radialisation of commercial vehicle tyres has led to shortage of end-of-life cross ply nylon tyres, the main raw material for the reclaim rubber industry till now. The growing use of tubeless tyres has also caused shortage of used tubes, another raw material for the reclaim rubber industry.
The reclaim rubber industry is also hit by fluctuations in crude oil prices. The industry uses synthetic rubbers such as butyl reclaim, WTR, and others made from crude oil and the fluctuating price of crude oil has affected the prices of reclaimed rubber’s raw material.
According to Zion Market Research, the global reclaim rubber market which stood at 3,190.6 kilo tons in terms of volume and USD 2.09 billion in terms of revenue is expected to expand to 5,651.2 kilo tons and USD 3.75 billion respectively in 2022 (see graph).
The expanding automotive and aerospace industries, especially in China, Thailand and India, are fuelling the demand for reclaim rubber owing to its resistance to heat and ultraviolet light. With surging demand for automobiles globally, reclaim rubber is increasingly used in manufacturing wheels, tyres, belt & hoses etc.
There is increasing demand from the aerospace industry as the production of aircraft tyres is on the rise following a spurt in demand for aircrafts from China and emerging economies such as India, Thailand and Malaysia. Reclaimed rubber is extensively used for industrial applications in place of synthetic rubber due to sustainability, less energy consumption and cost-effectiveness.
The increasing use of reclaim rubber in the manufacturing of footwear and extruded products such as drain tubes, pump discharge hoses etc. is also driving the market growth. The construction industry is increasingly using reclaim rubber for flat roof covering due to its heat and weather resistance and better aesthetic appeal.
Rising demand from the households and various industries for floor matting and increasing consumption for packaging, electronics and other industrial applications due to fast processing and good ageing are also positively influencing the product demand.
According to Market Research Future, a noticeable trend in the global market for reclaimed rubber is the soaring demand for whole tyre reclaim (WTR), which enjoys a market share of 40% at present (see graph). The robust demand is on account of its excellent versatility and durability, reduced processing costs, and little negative impact on the environment. The development of innovative elastomer-based products, however, has somewhat damped demand for this segment.
Butyl reclaim too enjoys a substantial share in the market. Going forward, however, EPDM is slated to outshine all the other types of products in terms of growth due technological progress that has resulted in better product properties and improved sustainability, says the market research agency.
Focus on Asia Pacific
The Market Research Future study reveals that Asia Pacific is the fastest growing region in the global reclaimed rubber market owing to the rising demand for automobiles coupled with the high demand for rubber from various industries in Indonesia, India, Vietnam, Thailand, and China. There is a growing trend of major recyclers shifting their manufacturing bases to low-cost destinations in the Asia Pacific region. Growing interest of the leading automobile players such as Maruti Suzuki and Hyundai to explore the rural areas is stimulating the product demand.
Europe is another prominent region in the reclaimed rubber market due to sustainability and less energy consumption in the manufacturing of automobile components. Targets set by the European Union (EU) to increase the energy efficiency level by 20% till 2030 is another driving factor for the growth of reclaimed rubber market.
The North American market is growing substantially owing to increasing use in the automobile and aircraft tyres. Increasing demand for the small wide body passenger airplanes and non-stop route due to more flexibility are driving the market growth. The developing automotive industry, especially in Mexico, is likely to drive the market growth in the Latin America region, reveals the study.
The Indian scenario
In India, the reclaim rubber manufacturers have increased their production capacity in the wake of the automobile boom, but many small-scale operators who dominate the sector have gone out of business due to various constraints such as obsolete technology, shortage of capital, inability to compete with big players etc.
Increasing investment by international players in India due to the availability of skilled labour, cost-effectiveness and low-cost steel production are propelling the market growth.
The product demand is rising from the aviation industry as a result of booming tourism in India coupled with high per capita income of the consumers. Moreover, the Indian Government’s plan to increase the number of operational airports to 250 by 2030 is likely to fuel the product demand in this region.
The reclaim rubber industry plays a great role in checking environmental pollution. As such the industry needs government support and favourable regulations to promote recycling efforts and sustainable materials.
There is also an urgent need to step up Research & Development to enhance usage, develop new production technologies and facilitate diversification in the sector.