Market Scenario
South America synthetic rubber market was valued at US$ 1,367.47 million in 2022 and is projected to attain a valuation of US$ 1,898.52 million by 2031, growing at a CAGR of 4.19% from 2023-2031. This growth can be attributed to various factors such as increasing demand for synthetic rubber in the automotive industry, rise in industrialization, and growing construction activities in the region.
The automotive industry is one of the largest consumers of synthetic rubber. With the rise in disposable income and population growth in South America, there is an increasing demand for automobiles in the region. This, in turn, drives the demand for synthetic rubber used in tires, belts, hoses, and other automotive components. The region is also experiencing a rise in industrialization, leading to an increase in demand for synthetic rubber for industrial applications. Synthetic rubber is used in the production of various industrial products such as seals, gaskets, and conveyor belts. The growing demand for industrial products further boosts the demand for synthetic rubber in the region.
Moreover, the South America synthetic rubber market is witnessing an increase in construction activities, which is expected to drive the demand for synthetic rubber used in roofing, waterproofing, and insulation materials. The construction sector is one of the major end-users of synthetic rubber, and the growing construction activities in the region will positively impact the market's growth.
Apart from this, the governments in South American countries are taking initiatives to attract foreign investments in the region. The investments in infrastructure development, automotive, and industrial sectors are expected to drive the demand for synthetic rubber in the region.
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Market Dynamics
Drivers:
Growing Demand from the Automotive Industry
The automotive industry is one of the primary consumers of synthetic rubber in South America. The use of synthetic rubber in the production of various automotive parts has increased due to its superior performance and durability compared to natural rubber. Synthetic rubber is being used in the production of tires, belts, hoses, and other automotive parts, leading to an increase in demand for synthetic rubber. Furthermore, the rising number of vehicles being produced and sold in the region is expected to drive the growth of the South America synthetic rubber market.
In addition to the superior performance of synthetic rubber, the increasing adoption of electric vehicles is also driving the demand for synthetic rubber in the automotive industry. The production of electric vehicles requires a higher amount of synthetic rubber than traditional gasoline-powered vehicles. This is because electric vehicles require larger batteries, and the production of these batteries involves the use of synthetic rubber. Thus, the growing demand for electric vehicles is expected to drive the growth of the South America synthetic rubber market in the coming years.
Expansion of End-Use Industries
The expansion of various end-use industries such as construction, electrical and electronics, and footwear is driving the demand for synthetic rubber in South America. The construction industry is using synthetic rubber in the production of seals, gaskets, and waterproofing membranes. The use of synthetic rubber in these applications provides improved durability and resistance to weathering, making it a preferred choice in the construction industry.
Similarly, the electrical and electronics industry is using synthetic rubber in the production of cable insulation and wiring. Synthetic rubber provides improved electrical and thermal insulation properties compared to natural rubber, making it a preferred choice in the electrical and electronics industry. Furthermore, the footwear industry is using synthetic rubber in the production of shoe soles due to its superior durability and slip resistance.
The expansion of these end-use industries is expected to drive the growth of the South America synthetic rubber market. Furthermore, the growing population and increasing urbanization in the region are expected to create a higher demand for synthetic rubber in various applications, further fueling the growth of the market.
Restrain: Volatility in Raw Material Prices
The prices of raw materials used in the production of synthetic rubber, such as crude oil and natural gas, are subject to fluctuations due to various factors such as geopolitical tensions, supply-demand imbalances, and weather conditions. This volatility can have a significant impact on the production costs of synthetic rubber, making it difficult for manufacturers to maintain profitability.
Furthermore, the dependency of the South America synthetic rubber market on raw material imports from other countries can also make it vulnerable to supply disruptions and price fluctuations. The increasing prices of raw materials can also lead to higher prices of synthetic rubber, affecting the demand for synthetic rubber in the region. As a result, manufacturers may need to look for alternative sources of raw materials or adopt cost-cutting measures to remain competitive in the market.
Segmental Analysis
By Type
The synthetic rubber market is primarily dominated by styrene butadiene rubber (SBR), which is projected to maintain a 31% market share throughout the forecast period. SBR is extensively utilized in the tire industry due to its remarkable abrasion resistance and low rolling resistance properties. These characteristics make it an ideal choice for manufacturing durable and fuel-efficient tires. As the demand for tires continues to grow in the region, driven by an expanding population, increased vehicle ownership, and improved economic conditions, the demand for styrene butadiene rubber is expected to rise accordingly, solidifying its dominance in the market.
By Form
In terms of form, solid synthetic rubber leads the synthetic rubber market, with an anticipated 69% market share over the forecast period. Solid synthetic rubber is highly valued in various industries such as tire manufacturing, footwear production, and other industrial applications, primarily due to its exceptional physical and chemical properties. These properties allow for the creation of durable, high-performance products, which translates to increased demand for solid synthetic rubber in diverse sectors, thus cementing its leading position in the market.
By Application
Focusing on application, the South America synthetic rubber market is dominated by tire to non-tire applications, which are predicted to account for over 54% of revenue share throughout the forecast period. The tire industry is one of the largest consumers of synthetic rubber in the region. This demand is driven by a combination of factors, including the growing population, rising disposable income, and increased vehicle ownership. As these trends continue to influence the market, the consumption of synthetic rubber in the tire industry will likely remain robust, ensuring the dominance of tire to non-tire applications.
By Industry
Based on industry, the transportation sector is expected to capture a majority South America synthetic rubber market share of more than 54% during the forecast period. The transportation industry is a significant consumer of synthetic rubber, primarily due to the rising demand for automobiles in the region. This surge in automobile demand is fueled by factors such as growing industrialization, infrastructure development initiatives, and an expanding middle class. As the region continues to experience economic growth and development, the demand for synthetic rubber in the transportation industry will likely grow, solidifying its dominant position in the market.
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Regional Analysis
Brazil is expected to dominate the South America synthetic rubber market with more than 41% market share during the forecast period. The increasing demand from various end-use industries such as automotive, construction, and footwear is expected to drive the growth of the market in Brazil.
Brazil is one of the largest producers and exporters of natural rubber in the world. However, the increasing demand for synthetic rubber in various applications has led to the growth of the synthetic rubber market in the country. The automotive industry is one of the primary consumers of synthetic rubber in Brazil, with the production of tires, belts, and hoses driving the demand for synthetic rubber. Furthermore, the construction industry is also utilizing synthetic rubber in the production of waterproofing membranes, sealants, and gaskets, further fueling the demand for synthetic rubber in the country.
The footwear industry is also one of the major consumers of synthetic rubber in Brazil. The production of shoe soles using synthetic rubber is gaining popularity due to its superior durability and slip resistance compared to natural rubber. As a result, the growing demand for footwear in the region is expected to drive the growth of the market in Brazil.
In addition to Brazil, other countries such as Argentina and Colombia are also expected to contribute to the growth of the South America synthetic rubber market. The expansion of end-use industries and the increasing adoption of synthetic rubber in various applications are expected to drive the growth of the market in these countries.
Top Players in the South America Synthetic Rubber Market
Market Segmentation Overview:
By Type
By Application
By Form
By End User
By Country
The South American Synthetic Rubber Market stood at $1,367.47 million in 2022.
The South American Synthetic Rubber Market is estimated to grow at a CAGR of 4.19% during the forecast period of 2023-2031.
A rising demand for motor vehicles worldwide, due to increasing disposable income and changing lifestyles of people, will act as a driving force for the South American Synthetic Rubber Market.
The volatility and fluctuations in the prices of raw materials may act as a barrier, slowing down the South American Synthetic Rubber Market.
The various segmentations considered to analyze market growth are based on type, application, form, end user, and country.
The rising sale of electric vehicles is likely to act as an opportunity for the market growth of the South American Synthetic Rubber Market.
Styrene Butadiene Rubber (SBR) held the highest market share, at 31.4%, in the year 2022.
Tire and non-tire was the highest application segment in 2022, with a market share of 54.5%.
Transportation, Building & Construction, and Textile & Apparel are the top 3 industries for the South American Synthetic Rubber Market in 2022, with market shares of 54.6%, 17.9%, and 11.0% respectively.
Brazil, Colombia, and Argentina dominated the South American Synthetic Rubber Market in 2022, with market shares of 40.6%, 19.4%, and 16.3% respectively.
ContiTech, Goodyear, HM Rubber, Rubber Brasil, Sumitomo Chemical Co. Ltd., and Yokohama are the key players in the market.
Mg Industria E Commercio S.A., Industries De Calcados Kissol Ltda, Vulcabras Azaleia & Dakota Nordeste S.A. are some of the prominent, local customers in the market.
The different applications of synthetic rubber in the market are tire and non-tire, footwear, erasers, sports items, hoses, belts, seals, industrial goods, and others.
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