Apr 2021

Rubber Shortage Becomes Latest Problem for Auto Industry

Natural rubber prices hit a four-year high in February at $2 a kilogram. Robert Meyer, the former CEO of the rubber firm Halcyon Agri Corp., told Bloomberg that he envisions prices reaching $5 per kilogram within the next five years. “The supply issues that we’re seeing now, they are structural,” said Meyer, who now works as a managing director for Angsana Investments Private Ltd. in Singapore. “They will not change very soon.”

The global supply of natural rubber has taken a hit, Bloomberg reports, taking car manufacturers from a rough place to a potentially rougher one. Rubber’s current scarcity issue does not have a single underlying cause; Bloomberg points to multiple contributing factors, including issues with shipping lines, countries stockpiling supply and diseases affecting the plants that supply the world with its rubber. According to Bloomberg’s report, American automakers are not feeling the squeeze, but they are keeping a close eye on it. Bloomberg’s own data shows that rubber prices have continued to climb over the last year, reaching a four-year high in February.