Maximizing Cost Savings  in Today’s Natural Rubber Market

In the ever-evolving landscape of industrial materials, natural rubber remains a cornerstone in various manufacturing sectors. From automotive to construction, its versatility and resilience make it indispensable. However, the pricing volatility of natural rubber can pose significant challenges to businesses reliant on this vital resource.

Over the years, natural rubber pricing trends have been subject to fluctuations influenced by numerous factors, including weather conditions, geopolitical tensions, and shifts in demand-supply dynamics. Such volatility often leads to unpredictability in production costs, adversely impacting profit margins for businesses worldwide.

Hidde Smit – The Netherlands Rubber Economy’s analysis and forecast consultant and Secretary-General of the International Rubber Study Group (IRSG), Singapore, said that the ability to broaden the supply-demand deficit in the future could push natural rubber prices in the next 5 – 6 years, and increasing price changes can remain until 2030. Mr. Smit also revealed that “Natural rubber price can rise to 1,8 – 2 USD/kg until 2025 and afterwards.” 1

After the dip in pricing in Q4 2022 and all of 2023, there is a significant uptick in Natural Rubber prices in Q1 2024, with average pricing levels in March 2024 surpassing 2.3 USD/kg, which even surpasses Mr. Smit’s predictions. 

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Amidst these challenges, savvy manufacturers are turning to an alternative solution: devulcanized rubber reclaim. Businesses can achieve substantial cost savings without compromising quality or performance by utilizing devulcanized rubber reclaim instead of solely relying on natural rubber.

Besides the obvious environmental benefit, one of the key advantages of devulcanized rubber reclaim lies in its cost-effectiveness. As natural rubber prices fluctuate, businesses can stabilize and lower their production costs by incorporating reclaimed rubber into their manufacturing processes.

Moreover, devulcanized natural rubber reclaim exhibits comparable properties to natural rubber once mixed into a compound, making it suitable for a wide range of applications. Whether it’s automotive tires, industrial hoses, or footwear, devulcanized reclaimed rubber can meet the stringent requirements of various industries while offering a sustainable and cost-efficient alternative.

In conclusion, natural rubber pricing trends are inherently volatile, posing challenges for businesses across industries. However, companies can mitigate the impact of fluctuating rubber prices as well as de-risk supply chains while achieving significant cost savings by embracing devulcanized rubber reclaim. As sustainability and economic efficiency continue to gain prominence, the adoption of devulcanized rubber represents a forward-thinking approach to resource management in the modern industrial landscape.

  1. Source ↩︎
Bram van den Berg, COO / CFO
As COO, Bram has over 20 years in logistics, financial analysis, and asset management. Responsible for all operational aspects of Circular Rubber and for the foreseeable future this project will be one of the key activities. Bram will be the leading CRT senior executive overseeing the project on a day to day basis. As the CFO, Bram is responsible for the finances of Circular Rubber and financial projections.