a. Raw Material Price Fluctuations
Natural rubber prices, influenced by climate change and geopolitical tensions, surged by 40% in 2024, squeezing margins for small manufacturers. Synthetic rubber, derived from petrochemicals, faces volatility due to oil price swings.
Mitigation Strategies: Companies are diversifying suppliers, investing in hedging contracts, and increasing the use of recycled materials to reduce dependency on virgin rubber.
b. Regulatory Compliance Costs
Stricter environmental laws, such as the EU’s REACH and China’s “Dual Carbon” goals, require costly upgrades to production facilities. For example, VOC emissions standards have forced firms to invest in low-VOC curing agents, adding 15–20% to production costs.
c. Intense Competition and Market Fragmentation
The industry remains fragmented, with over 5,000 players globally, including small regional suppliers. Price wars in low-end markets (e.g., general-purpose rubber sheets) have eroded profitability, pushing firms to differentiate through customization and branding.
