The supply and demand gap for natural rubber continues, and the EU-India Free Trade Agreement has been implemented.
- Market Dynamics
The Association of Natural Rubber Producing Countries (ANRPC) states that the global natural rubber market is currently undergoing consolidation, with a persistent supply-demand gap. Although the price of natural rubber denominated in US dollars has slightly declined due to the strengthening of the Thai baht, strong domestic price support in Thailand suggests that the current consolidation phase may serve as a springboard for the next round of price increases.
A survey by the UK Chemical Business Association shows that 96% of chemical-related companies in the UK believe that industry planning is unclear, and 80% of companies are negatively impacted by government decisions. The industry warns that without countermeasures, this could lead to industrial relocation, thereby damaging the UK's industrial base and supply chain resilience.
On January 27th, the India-EU Free Trade Agreement was formally reached. This agreement provides preferential access to 99% of India's exports, with the rubber, plastics, and chemical industries being the core beneficiaries. Specifically, 97.5% (by value) of chemical exports will enjoy zero-tariff treatment.
- Industry Data
New car registrations in the EU are projected to increase by 1.8% year-on-year to 10.82 million vehicles by 2025, but this is still far below pre-pandemic levels. In the segmented market, hybrid vehicles became the preferred choice for consumers with a 34.5% market share, while electric vehicles rose to 17.4%, and the combined share of gasoline and diesel vehicles fell to 35.5%, a significant decline from 45.2% in 2024.
- Investment and Production
Circtec completed and put into operation Phase I of Europe's largest waste tire pyrolysis plant in the Netherlands, with an annual processing capacity of 50,000 tons. Phase II is planned to start construction this year, bringing the total capacity to 200,000 tons upon completion.
Toyo Tire partnered with HF Group to build an innovation center at its Ingia plant in Serbia. The 6,000-square-meter center will see HF Group responsible for the design, supply, and installation of the R&D production line, providing advanced compounding technology to support innovation in high-performance, energy-efficient tire formulations. It is expected to be operational in 2027.
Reka Rubber announced plans to establish a wholly-owned subsidiary in Ukraine to advance its long-term growth strategy. The company is currently selecting suitable properties and will make a final investment decision soon.
Solvay has inaugurated Europe's first bio-recycling silica plant in Italy. This plant uses rice husk ash as a raw material to produce highly dispersed silica for tires, achieving a 35% reduction in carbon emissions per ton of product. Continental Tire has explicitly stated its intention to increase the application of this material, highly recognizing its performance.
Asahi Kasei, Mitsui Chemicals, and Mitsubishi Chemical signed an agreement to consolidate ethylene production capacity in western Japan by fiscal year 2030. The company will close its Mizushima plant and concentrate production at its Senhoku plant, reducing total capacity from 951,000 tons per year to 455,000 tons. Simultaneously, the three parties will invest in a bioethanol-based olefins plant, expected to be operational in 2034.
- Company News
Nexen Tire's sales are projected to reach a record 3.2 trillion won in 2025, but operating profit is expected to decline slightly by 1.1% to 170 billion won. To cope with trade uncertainties, the company is actively adjusting its strategy through capacity expansion in Europe, diversifying its distribution channels, and promoting larger-size tires.
Trelleborg Group's full-year 2025 EBITDA rose slightly by 2% to SEK 6.3 billion. The group plans to invest in new factories in India, the US, and Morocco in 2026 to solidify its long-term growth platform.
Kumho Tire signed a memorandum of understanding with Lotte Innovations of South Korea to jointly develop smart tire technology for autonomous vehicles. Kumho will provide tires adapted for electric vehicles and a smart system for real-time monitoring of tire pressure, temperature, and other conditions.
Parker Hannifin's second-quarter sales for fiscal year 2026 increased by 9% year-on-year to $5.2 billion, driven by strong demand in the aerospace sector. The company raised its full-year sales and profit margin forecasts.
Bekaert reached an agreement with Bridgestone to acquire Bridgestone's tire reinforcement business in China and Thailand for €60 million, a business with annual sales of approximately €80 million. The two companies signed a long-term supply agreement, and the transaction is expected to be completed in the first half of 2026.
