According to The Future of Tyre Raw Materials to 2021, tyres are a major global business, consuming almost 40 million tonnes of materials in 2014. Purchasing these materials makes up around 30% of a tyre company’s sales, and the materials input is estimated at $70 billion globally in 2014. Despite the predicted slowing of the world economy, tyre materials supply is estimated to rise at a CAGR of 3.1%, to reach approximately 47 million tonnes by 2021.
Despite this growth, there are challenging times ahead for materials suppliers to the tyre industry. Trends towards lighter weight tyres is reducing demand on materials; and tyre makers are targeting materials inputs as a source of cost savings.
Until recently, the growth in the tyre market has been slightly above world GDP, fuelled by rising population numbers and growth of the BRIC economies. This link is expected to continue, but with world GDP probably growing more slowly than previously expected, due to a global slowdown, most notably in the BRIC markets. Material weight has increased slightly faster than the number of tyres, as rising affluence has led to the increased purchase of larger tyred vehicles.
Materials availability and cost is an ongoing topic, because of the large size of the tyre market and its use of significant fractions of the world supply of some materials. It is also an important consideration for the introduction of new materials – they must usually be available worldwide, in significant amounts and of consistent quality.
A key issue is with the choice of rubber. While blends are nearly always used to optimise performance and cost, these can vary markedly in composition. NR has superior properties in many regards, especially toughness, and predominates in heavy duty tyres such as for T&Bs, OTR and agriculture. The major issues limiting NR are cost volatility and security of supply. Historically NR has been more expensive than SR and so SBR has been more prevalent in the blends used in PC tyres. There is wide variation in prices and this is expected to continue in the immediate future.
There is increasing governmental awareness of environmental issues, which have already had an effect on the tyre and tyre materials market. These include emissions reductions, which has resulted in low RR technology in tyres (energy tyres); sustainability, with significant efforts being directed to recycling and to finding more sustainable sources of raw materials; and reduction in end of life waste.
The Future of Tyre Raw Materials to 2021 takes a broad look at how these trends will affect the global tyre industry over the next five years. It examines the various threats and opportunities to tyre materials and forecasts how these threats and opportunities will affect consumption to 2021.