Posted July 25, 2018 06:14:59AUSTRALIA’S rubber industry is growing at an annual rate of 10.5 percent, with growth in areas such as the construction industry and construction machinery increasing from just under 1 percent in the past 12 months to 3.3 percent in 2018.
Key points:Rubber height increasing activitiesIncreasing activity in the rubber industry are up 20 percent in three yearsThe industry is expected to increase by around 5 percent in 2020 to around 70,000 tonnesA major factor behind this increase is the increase in rubber prices from $4 to $8 per metric tonIncreasing activities in the industry are increasing activity in areas including the construction, mining, and quarrying industriesThe rubber industry in Australia has seen growth of around 10.1 percent over the past three years, with construction industry activity increasing by nearly 3.5 per cent and mining and quarry work activity increasing 20.6 per cent.
However, this growth has been offset by an increase in activity in other industries, particularly in areas like the construction machinery industry and the rubber height increasing industries.
A key factor behind the rubber price increase is that there are more tyres and tyres are cheaper, with an average price of $4.20 per metric tonnes for a standard size of tyre, while the rubber density in a tyre is less than one gram per millimetre.
“The increase in tyre prices is primarily due to the increased use of rubber and the reduction in supply due to a reduction in rubber production,” said John Taylor, a research and consulting partner with consultancy firm Sanderton.
“In addition to the increase of rubber prices, the increased activity in rubber manufacturing has had an impact on rubber production.”
Rubber production has increased by around 15 per cent since 2020, with the rubber sector adding nearly 200,000 jobs.
While this increase has been accompanied by a rise in rubber density, the increase is not the only factor behind an increase of the rubber market.
A study published in June 2018 by the Australian Institute of Labor and Employment (AILEE) found that the increase has largely been due to an increase on the supply side of the supply chain, with production volumes increasing by around 25 per cent from 20,000 to 40,000 metric tonnes per year in the last three years.
The study also found that more workers are needed to meet demand in the sector, and the industry was still facing labour shortages, but the increase was seen in the construction sector and the construction equipment industry, where there were an increase from just over 5,000 people to 15,000.
“There is an increasing demand for rubber in Australia, particularly for the construction industries, as the rubber densities are increasing, and demand for machinery is also increasing,” said Mr Taylor.
“This means there is an increased need for more rubber to meet these increased demand demands, and this has led to increased supply of rubber, which is a key factor for the increase.”
According to AILEE, demand for new machinery in the production of rubber is higher than ever, with demand for tyres and rubber being the main growth drivers for demand.
“More and more rubber is being produced in Australia,” said Dr Andrew Smith, assistant professor at the University of New South Wales School of Business.
“We’re seeing an increase both in the demand and the supply for rubber.”
He said this is due to increased demand in manufacturing and increased demand from the construction and construction equipment industries.
“Construction equipment is one of the industries where we see an increase.
That’s why we’re seeing this increase,” he said.”
And it’s also the reason why we’ve seen the increase over the last few years, because we’ve been getting an increase and an increase that’s not necessarily because of the increase the price.”
It’s probably more because the increase that we’ve had in rubber has been an increase we’ve got to get that out of the way of that.
“The study said there were also signs of increasing interest in developing technologies for the manufacture of rubber.”
Technology such as bio-based materials, nanotechnology, bioprinting and microelectronics will be the focus of the future in the manufacturing of rubber,” it said.