How Will The Rubber Shortage Affect Manufacturing?

Throughout much of 2020 and now well into this year, many material shortages and supply chain issues have affected all types of industries. A global semiconductor shortage, skyrocketing lumber prices, and a shipping container snarl are just some of the problems rippling across many industrial and manufacturing sectors. Complicating and exasperating many of the headaches already in effect, a looming rubber shortage could become a severe disruption for all types of manufacturers and producers.

Although many industries have long replaced natural rubber with more enduring synthetics, for example, substituting natural rubber washers with neoprene washers for sealing purposes, a shortage of natural rubber and latex could still be crippling.

Problems PrecedingThe Pandemic

A hindrance in natural rubber production is troubling for its long-term ramifications. The causes of the shortage are owed to more than just the effects of Covid-19 shutdowns. Climate change’s impact on rubber tree growth and the effects of limited planting, leaf disease, and fungus have compounded global market problems. These changes have led some experts to warn that we are on the cusp of a “rubber apocalypse”.

Even with the rise of synthetic materials that can imitate and expand upon the properties of natural rubber—look no further than silicone gaskets and EPDM washers serving as substitutes for rubber flat washers—more than 40,000 commercial products require natural rubber or rubber-tree derived latex in their production. More than 85 percent of that natural rubber comes from independent producers in southeast Asia. These small farms face challenges in the best of times. A rubber tree planted today will not produce the sap levels required for natural rubber production for four to seven years. This makes it hard to anticipate planting levels needed to reliably sustain farms, maintain resources to counter natural diseases and foster productive crops, and also meet present market demand.

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Ripple Effects Expected Across Many Industries   

From the elastic bands in sock cuffs to airplane tires, a natural rubber shortage could have unprecedented ripple effects across industrial and commercial markets. For many U.S. manufacturers, especially those serving or in the automobile industry, rubber supply shortages are becoming worrisome and slowing down an already tenuous post-pandemic recovery. Some industry experts say that this issue could be the most pressing of all other supply-chain ills.

In the cases of other supply chain slowdowns, like lumber and shipping containers, some market watchers have advised manufacturers to sit tight and wait for the fluctuations to steady, but natural rubber problems may be stubborn, or at best, cyclical. China’s significant consumption of natural rubber has made an already high-demand commodity even more critical for U.S. manufacturers to secure. That demand isn’t likely to go away, even if growers attempt to recover planting rates and in increasingly challenging growth and tapping conditions.

Some industry watchers have warned these severe market upsets could lead to a shift in the just-in-time approach to manufacturing, which is the practice of keeping material stock at a minimum to control overhead costs and focus more on investment, low-margin, highly competitive manufacturing. Such a strategy may not be viable when supply chains are a direct product of tumultuous times.

But these challenges are breeding innovation. Scientists and manufacturing strategists are looking at alternative plant sources for producing natural latex. These resources, along with new technologies in tire design, synthetic materials, and more, could help make U.S. manufacturers less vulnerable to supply chain upsets. For now, however, patience and perseverance will have to hold strong while global markets and supply chain recovery rates continue to fluctuate.   

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