What The Rubber ‘Apocalypse’ Means For The U.S. Economy

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Published 2021-07-09
The global economy now faces a rubber shortage because of multiple supply chain disruptions. "We could be on the cusp of a rubber apocalypse," Ohio State University professor Katrina Cornish told CNBC. Rubber producers are working against all odds: climate change, disease and the fight for shipping containers. The global rubber market was valued at nearly $40 billion in 2020, but one analysis predicts the natural rubber market could be worth nearly $68.5 billion by 2026.

Rubber is a critical raw material needed for car tires, personal protective equipment such as masks and gloves, and many more everyday products. Anytime you’re going anywhere, you’re using rubber. Now, supply chain disruptions have thrown the rubber industry into a tailspin.

“We could be on the cusp of a rubber apocalypse,” Ohio State University professor Katrina Cornish told CNBC.

Rubber producers are facing climate change, the Covid-19 pandemic, a destructive fungus and the fight for shipping containers.

The global economy remains dependent on Asia for 90% of the natural rubber supply. For example, the U.S. imported $140 million worth of natural rubber in March 2021 alone, according to Census data.

The global natural rubber market was valued at nearly $40 billion in 2020, and demand for rubber is expected to increase. One analysis predicts the natural rubber market could be worth nearly $68.5 billion by 2026. One reason for the increased demand? Car tires.

“We are using tires more and more,” Stefano Savi, director of the Global Platform for Sustainable Natural Rubber, told CNBC. “The amount of mileage that we’re going to do as a global population is definitely bound to increase, and that’s why the demand for rubber is really continuing to increase.”

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What The Rubber ‘Apocalypse’ Means For The U.S. Economy

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All Comments (21)
  • @MrArthoz
    I'm from Malaysia, a country in Southeast Asia who is also a major producer of rubber. Let me explain why the rubber is in danger. Rubber trees are no longer just clones but they are also genetically engineered to grow fast and produce latex soon. Usually within 4 years. These new generation trees are smaller and weaker and prone to falling down during storms. I had experienced it several time and dare not drive out from my orchard during rainstorm out of fear for broken branch and trees. Many decades ago, rubber trees takes a long time to grow and they grow huge. Nearly 8 to 10 years of growth before you can start tapping them. They produces a lot of latex per tapping each day. People don't use the small bowl you see today. They nailed a small tank on the trees. The trees are huge, resistant to disease and weather. A single tree produces far more than several trees today. That is what we get from greed. Short term profit but long term loss.
  • I live in Thailand and the farmers here are not making much money from rubber, most prefer to grow rice, because even if you can't sell it, at least you can eat it.
  • my father was rubber tapper; rubber is dirt cheap locally and hard for the locals to make good living. The big companies are making tons of money buying rubber cheaply. Not a fair world.
  • @johnhepbean4346
    Translation = Yes we are going to raise the price on everything including rubber. You will own nothing and be happy.
  • @Me-sq9ol
    The media loves words like “apocalypse.” It gets them eyeballs.
  • @ProtoMario
    My God, everything is an apocalypse these days.
  • @MalhaIIa
    Well then. Time to finally actually recycle the mountains of used tires we have.
  • @theDudeOfDudes
    "Aren't you gonna put a condom on?" "Girl, haven't you heard we're in a RUBBER APOCALYPSE?"
  • @RollaArtis
    Don't worry - I'm sure that rubber will bounce back sometime.
  • There's about to be a cheeseburger apocalypse at my house right now.
  • @PhilipMurray251
    if your investing experience is less than 10 years start with 5-6 portfolio. don't bet big on any single company, learn the process first.. initially diversification is not that bad, it really worked for me in initial years. remember that protection of capital is a must
  • @temgmcks00
    “There are synthetic rubbers, but sometimes it can’t be swapped out for the real thing because of natural rubber’s particular properties. Take airplane tires as an example; gotta be 100% natural rubber. And most natural rubber doesn’t come from the U.S.; not even North America.” Great example there…that really helped me understand natural rubber’s properties and why you can’t just substitute synthetic rubber.
  • @jimhofer3802
    Someone wake me when the four horsemen get here…
  • @JeffreyBoser
    An important addition: natural rubber can only be stored for 2-5 years, it breaks down over time even with careful storage conditions. So it is hard to stockpile in its natural form.
  • @andstewart9982
    Having more than one source of income is the best way to secure your future.
  • @chrisandrews414
    The new scare is ___ SHORTAGES! tune in next week to find out what house hold item will suddenly skyrocket 500% in value!
  • It's sobering to realise just how fragile the systems we rely on are.
  • @RedDogForge
    the majority of modern rubber isnt natural rubber, this is pandering to fear.