Butyl Rubber Market Outlook:
Butyl Rubber Market size was USD 3.85 billion in 2024, and it is expected to reach USD 5.30 billion by 2037, growing at a CAGR of 4.2% from 2025 to 2037. In 2025, the industry size of butyl rubber is estimated at USD 3.91 billion.
The primary growth driver of the butyl rubber market is the growing automotive industry, especially in emerging nations. Butyl rubber's higher air impermeability and resistance to chemicals render it an incredibly vital component used in the production of tires and inner tubes. The United States imported around 41.9 million kilograms of butyl synthetic rubber in 2023, showcasing the importance of the compound in the automotive sector. Government support for the manufacture of electric vehicles drives the market demand. The United States government provided USD 13 billion in loans to manufacturers and suppliers in a bid to drive plant conversion to EV manufacturing. Such approaches are expected to increase the demand for butyl rubber in tire production and thus drive the growth of the market. Isobutene, the largest raw material for butyl rubber, is mainly sourced from petroleum and natural gas at the raw material supply chain stage.
Further, World trade statistics state that India imported nearly 22.4 million kilograms worth USD 44.87 million of butyl rubber-isobutene-isoprene in 2023 from Russia, Singapore, Saudi Arabia, China, and the United States. Investments and collaborations among major key players are also driving the market. Reliance Industries and Sibur collaborated and formed a joint venture in Jamnagar, Gujarat, India, to manufacture 60,100 tons of halogenated butyl rubber every year. These expansion plans prove that the industry is willing to meet increasing demand. Pricing: While there is no credible Producer Price Index (PPI) or Consumer Price Index (CPI) for butyl rubber, market dynamics for the industry were expected to be in line with cost containment and innovation to compete in the global marketplace.
Butyl Rubber Market - Growth Drivers and Challenges
Growth Drivers
-
Automotive industry demand: Over 62% of the world's butyl rubber has major applications in the automotive industry, and is one of the main growth drivers in tire production. With global automotive production poised to cross 102 million units in 2030, the market for butyl rubber is expected to grow in double-digit numbers. The increasing demand for EVs with a CAGR of 22.2% from 2023-2030 also boosts this demand as EV tires require abrasion resistance and air tightness to a larger extent. Asia Pacific alone, accounting for more than 51% of the world's vehicle production, is likely to propel consumption of butyl rubber in 2037. All such trends make the automobile industry one of the top growth drivers, with butyl rubber consumption likely to increase along with car production and EV penetration.
-
Regulatory compliance costs: The EPA and the European Chemicals Agency (ECHA) have raised levels of compliance, especially under the revised Toxic Substances Control Act (TSCA) and REACH regulations. The new EPA regulation, which was recently rolled out, compels manufacturers of chemicals to disclose huge amounts of safety data of more than 16 hazardous chemicals by 2026, which is expected to be equivalent to an estimated 15% rise in compliance costs. Although this is costly to operate, it also encourages manufacturers to implement cleaner production technologies and improved chemical safety levels. The law also encourages R&D expenditure, with worldwide chemical R&D expenditure increasing to over USD 26 billion annually, thus encouraging sustainable development and innovation for the butyl rubber sector.
1. Market Volume and Growth Trends in the Butyl Rubber Market
Value of Butyl Rubber Shipments by Country (2023)
|
Country |
Shipment value (USD Million) |
CAGR (2018-2023) |
|
U.S. |
851 |
5.9% |
|
China |
721 |
6.3% |
|
Germany |
421 |
3.8% |
|
India |
181 |
8.6% |
|
Southeast Asia |
151 |
6.4% |
Market Volume and Growth Rates by Region (2023-2028 Projection)
|
Region |
Market volume (KT) |
Growth rate (%) |
|
North America |
121 |
4.1% |
|
Asia Pacific |
251 |
6.6% |
|
Europe |
102 |
3.6% |
|
Rest of the World |
71 |
3.9% |
2. Emerging Trade Dynamics in the Butyl Rubber Market
Import & Export Values of Butyl Rubber Chemicals (2019-2024, USD Billion)
|
Year |
Global trade value |
Asia-Pacific |
Europe |
North America |
Rest of World |
|
2019 |
2.9 |
1.2 |
0.8 |
0.7 |
0.6 |
|
2020 |
2.59 (-7.9%) |
0.8 |
0.66 |
0.56 |
0.49 |
|
2021 |
3.1 |
1.2 |
0.76 |
0.63 |
0.54 |
|
2022 |
3.6 (+9.6%) |
1.4 |
0.86 |
0.8 |
0.66 |
|
2023* |
3.76 |
1.5 |
0.8 |
0.76 |
0.8 |
|
2024* |
4.1 |
1.6 |
0.96 |
0.9 |
0.76 |
Key Butyl Rubber Chemical Trade Routes & Shipment Values (2022, USD Billion)
|
Route |
Shipment value |
Percentage of global trade |
|
Japan → Asia |
221 |
6.3% |
|
Europe → North America |
181 |
5.2% |
|
China → Southeast Asia |
151 |
4.4% |
|
U.S. → Europe |
155 |
4.5% |
U.S. Specialty Chemical Exports to Europe (2018-2023)
|
Year |
Export value (USD Billion) |
Annual growth rate (%) |
|
2018 |
10.6 |
- |
|
2019 |
11.3 |
6.8 |
|
2020 |
10.9 |
-3.7 |
|
2021 |
13.2 |
20.5 |
|
2022 |
14.6 |
11.6 |
|
2023 |
15.5 |
6.3 |
3. Capital Investment Trends in Japan’s Butyl Rubber Industry
Japan’s Butyl Rubber Capital Investment (2018-2023, USD Billion)
|
Year |
Total investment |
Sustainability & R&D (%) |
|
2018 |
0.9 |
36% |
|
2019 |
0.86 |
39% |
|
2020 |
0.8 |
43% |
|
2021 |
1.2 |
46% |
|
2022 |
1.2 |
48% |
|
2023 |
1.3 |
49% |
Capital Investment by Leading Japanese Chemical Companies (2023, USD Billion)
|
Company |
Investment amount |
% of Japan’s sector investment |
|
Mitsubishi Chemical |
0.36 |
28% |
|
Sumitomo Chemical |
0.4 |
26% |
|
JSR Corporation |
0.4 |
27% |
|
Others |
0.26 |
21% |
Global Chemical Industry Capital Investment & Sustainability Focus (2023)
|
Region |
Total investment (USD Billion) |
% Toward sustainability & R&D |
|
Asia-Pacific |
29 |
41% |
|
U.S. |
26 |
41% |
|
Europe |
23 |
46% |
|
Japan |
6 |
49% |
Challenges
-
Environmental regulations and compliance costs: Tighter environmental regulations by institutions like the U.S. EPA and the EU's ECHA are hiking production costs for butyl rubber manufacturers. Compliance with regulations such as the EPA’s revised Toxic Substances Control Act is increasing operating costs by up to 16%, posing significant challenges for small and mid-sized companies. In 2023, Lanxess invested over USD 121 million in clean technology to meet stringent EU standards and still achieved a 16% rise in market penetration, despite the rising upfront expenses. Developing economies adopting these rigorous regulations are also facing greater obstacles in scaling up production. Overcompliance expenses also constrain spending on research and capacity increases. This is the regulatory environment still dictating countries' production policies.
-
Pricing pressures and market access barriers: Unstable crude oil prices lead to fluctuations in raw material prices, reducing the profit margins of producers of butyl rubber. Volatility in price discourages long-term contracts and budgeting along the supply chain. Complexity in import restrictions and trade tariffs adds additional hurdles, such as U.S.-China tariffs and Southeast Asian import taxes averaging 5-9%, limiting access to the market. Therefore, Dow Chemical established a manufacturing plant in Singapore in 2023, reducing regional expenses by 8% and avoiding tariffs. Nevertheless, the majority of producers continue to experience delays and added expenses from fragmented international trade measures. Such obstructions hinder market growth and expansion, primarily for minor suppliers. Intense geopolitical tensions may continue and further cripple trade flows.
Butyl Rubber Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
4.2% |
|
Base Year Market Size (2024) |
USD 3.85 billion |
|
Forecast Year Market Size (2037) |
USD 5.30 billion |
|
Regional Scope |
|
Butyl Rubber Market Segmentation:
End User Segment Analysis
The automotive industry holds the largest share, accounting for approximately 46% of the butyl rubber market by 2037. This dominance is driven by the extensive use of butyl rubber in tire manufacturing, inner tubes, and automotive seals, propelled by the rising production of electric vehicles (EVs) and stringent safety regulations globally. The pharmaceutical sector follows closely, leveraging butyl rubber for medical packaging such as vial stoppers and seals due to its excellent impermeability and chemical resistance. Other industries like construction, consumer goods, and electrical & electronics contribute to demand growth, with applications ranging from adhesives to insulation materials. Regional industrial expansion, especially in Asia-Pacific, along with regulatory standards and technological advancements, continues to fuel diversified end-use adoption of butyl rubber products.
Distribution Channel Segment Analysis
Direct Sales is estimated to dominate the distribution channel segment, capturing around 50% market share by 2037, as manufacturers prioritize direct engagement with large industrial clients for customized supply and quality assurance. Distributors serve an essential role in reaching smaller manufacturers and regional markets, providing logistical support and inventory management. The online channel is emerging as a growing distribution route, offering convenience and efficiency, particularly for specialty grades and smaller volumes. Multi-channel strategies, combining direct and indirect routes, are critical in ensuring resilient supply chains amid fluctuating trade policies and increasing demand for quick delivery, thus enabling manufacturers to better serve global and regional markets.
Our in-depth analysis of the global butyl rubber market includes the following segments:
|
Segment |
Subsegment |
|
Application |
|
|
Product type |
|
|
End user |
|
|
Distribution channel |
|
Vishnu Nair
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Butyl Rubber Market - Regional Analysis
Asia Pacific Market Insights
Asia Pacific (APAC) is expected to lead the global butyl rubber market through 2037, with a share of around 66% of the worldwide market. This is powered by strong demand from the automobile, pharmaceutical, and industrial sectors within key economies. Support through tax relief as well as funding mechanisms from governments also powers the market. Rising infrastructure development and urbanization across countries like India, China, and Indonesia are further fueling consumption. Strategic investments in local manufacturing and supply chain capabilities are enhancing regional self-sufficiency. Additionally, growing environmental awareness is prompting increased interest in sustainable and high-performance rubber solutions.
Japan is expected to hold the largest market share of the APAC butyl rubber industry by 2037. The country’s robust automotive sector, accounting for over 20% of its industrial output, coupled with stringent environmental regulations, is driving strong demand for high-quality butyl rubber solutions. State initiatives such as the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) offer attractive financial incentives to organizations adopting green technologies, including those within the chemical industry. In 2023 alone, the Japanese government allocated more than USD 2.3 billion to projects under these schemes, reflecting a significant commitment to green practices. Furthermore, Japan’s target to achieve net-zero emissions by 2050 is accelerating the adoption of environmentally friendly materials like butyl rubber across various applications, especially in the automotive and pharmaceutical sectors.
India is anticipated to register the highest compound annual growth rate (CAGR) in the APAC butyl rubber market between 2025 and 2037, estimated at around 8.7%. The rapid expansion of India’s automotive industry, which is expected to become the third-largest in the world by 2030 alongside increasing healthcare needs, is driving the use of butyl rubber in tire manufacturing and pharmaceutical packaging. Additionally, government-led industrialization and infrastructure development programs, such as the National Investment and Manufacturing Zones (NIMZs), indirectly support the butyl rubber market. India’s strong focus on sustainable development and clean technology, evidenced by a projected USD 90 billion green energy investment pipeline by 2030, further opens up opportunities for the adoption of eco-friendly butyl rubber products. These industrial policies and growth drivers position India as a key market for future development in the butyl rubber industry.
Butyl Rubber Market in APAC: Country-wise Analysis (Investments, Research & Innovation)
|
Country |
CAGR (2024–2030) |
Key Investments |
Research & Innovation Highlights |
Major Players |
|
China |
5.8% |
- $200M expansion by Sinopec (2023) |
- 45+ patents in butyl rubber tech (2020–2023) |
Sinopec, Zhejiang Cenway |
|
Japan |
4.2% |
- $80M R&D investment by JSR Corp (2023) |
- 30+ patents in halogenated butyl rubber |
JSR Corp, Zeon Corporation |
|
India |
7.5% |
- Reliance Industries’ $120M Gujarat plant (2025) |
- 15+ patents in medical-grade butyl rubber |
Reliance, LANXESS India |
|
South Korea |
5.0% |
- LG Chem’s $60M R&D hub (2022) |
- 20+ patents in butyl rubber composites |
LG Chem, Kumho Petrochemical |
|
Thailand |
6.3% |
- PTT Group’s $50M joint venture with Arlanxeo (2023) |
- 10+ patents in tire applications |
PTT Global Chemical, Arlanxeo |
|
Malaysia |
5.7% |
- PETRONAS $40M specialty rubber unit (2024) |
- 8+ patents in butyl rubber adhesives |
PETRONAS, Synthomer |
North America Market Insights
The North American butyl rubber market is expected to hold around 18% of the international market share in the year 2037. This expansion is primarily powered by Canada's and the United States' strong automobile industry, where butyl rubber has wide applications in the tire industry due to its high air retention and life properties. The pharmaceutical industry in Canada and the United States also contributes to strong demand, applying butyl rubber in medical stoppers and seals due to its resistance against gas and moisture. Growing investments in electric vehicles (EVs) are further propelling the demand for advanced rubber compounds with enhanced performance.
In 2023, North American tire production exceeded 360 million units, underscoring the region's scale of demand for butyl rubber. Government regulations promoting fuel efficiency and emission reduction are increasing the use of lightweight, durable materials like butyl rubber. Additionally, the presence of major chemical manufacturers and R&D centers in the region is fostering innovation in high-performance butyl rubber products.
The 2022 U.S. federal budget provided a total of about $196 billion for energy programs, including funding for green manufacturing efforts and clean energy technologies. The Strategic Innovation Fund, in particular, enhances the innovation of clean technologies that indirectly support sectors such as butyl rubber production by encouraging sustainable approaches and minimizing environmental footprint. In addition, the CHIPS and Science Act enacted in August 2022 allocated approximately $281 billion in new funds to enhance domestic chip research and manufacturing within the United States, $52.8 billion of which was allocated for semiconductor fabrication and research. Though primarily targeting the semiconductor business, this legislation is a reflection of the U.S. administration's hope to promote manufacturing expansion, which has spin-off benefits to allied industries such as the manufacture of butyl rubber.
Furthermore, Canada promotes clean energy in its $16 billion Canada Growth Fund, created to mobilize private capital for clean tech initiatives. This is a great strategy by Canada to reduce greenhouse gas emissions to zero. This fund invests in projects that are produced by sustainable production, and there is a possibility that the butyl rubber industry is moving towards greener practices. The Canadian government budget, in 2023, tabled $84 billion of clean economy tax credits that were expected to lower emissions and drive clean tech manufacturing. The tax credits were expected to make investments in clean energy projects, such as chemical industry-linked projects, easier. The clean economy trend in the Canadian government is in tandem with the international move towards sustainability and provides the butyl rubber industry with an opportunity to reduce its carbon footprint and develop through innovation.
Europe Market Insights
The European butyl rubber market is projected to grow steadily through 2037 on the strength of rising demand from the automotive and pharmaceutical industries. The automotive industry, and the electric vehicle (EV) industry in particular, is one of the key consumers of butyl rubber as a raw material for tire production. During 2023, the European Union implemented new CO₂ norms for automobiles and vans to cut greenhouse gas emissions by 56% by the year 2030, anticipating an encouragement of EVs and therefore the demand for butyl rubber. Growth in the pharmaceutical industry, driven by population aging and enhanced healthcare requirements, is also boosting demand for butyl rubber for medical uses. Government policies, for example, the European Green Deal, are incentivizing green technologies and sustainable practices through investment, which is also driving the growth of the market.
Country-Wise Insights, Advancements, Future Strategies, And Funding
|
Country |
Market Insights |
Latest Advancements |
Future Strategies |
Funding & Investments |
|
Germany |
Leading producer & consumer; strong automotive & pharmaceutical demand. |
Development of halogen-free butyl rubber for eco-friendly tires. |
Focus on sustainable production & recycling initiatives. |
€50M R&D investment by Lanxess for green butyl rubber. |
|
France |
High demand for medical stoppers & industrial seals. |
Arkema’s bio-based butyl rubber is under testing. |
Expansion in pharmaceutical & aerospace applications. |
Government grants for bio-based material innovation (~€20M). |
|
Italy |
Major tire manufacturing hub; butyl rubber is used in inner liners. |
Versalis (Eni) is investing in butyl rubber recycling tech. |
Circular economy adoption in tire production. |
Private equity funding for recycling startups (~€15M). |
|
Netherlands |
Key logistics hub for butyl rubber distribution. |
ExxonMobil’s advanced butyl rubber grades for high-performance tires. |
Strengthening the supply chain for EV tire demand. |
Port infrastructure investments (~€30M) for raw material handling. |
|
UK |
Declining production but strong R&D in specialty butyl rubber. |
Collaboration between universities & industry for butyl-based adhesives. |
Shift toward niche applications (e.g., EV batteries). |
Innovate UK funding (£10M) for sustainable rubber projects. |
|
Poland |
Emerging market with growing tire & construction sectors. |
Synthos is developing butyl rubber for construction sealants. |
Attracting FDI for rubber processing plants. |
EU structural funds (~€25M) for industrial expansion. |
|
Spain |
Steady demand from the automotive & construction industries. |
Repsol’s R&D in butyl rubber for renewable energy storage. |
Focus on energy-efficient production methods. |
Public-private partnerships (€12M) for green chemistry. |
Key Butyl Rubber Market Players:
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The global butyl rubber market is characterized by intense competition among established players and emerging companies. Leading manufacturers like ExxonMobil, LANXESS, and SIBUR dominate the market, leveraging their extensive production capacities and technological advancements. For instance, ExxonMobil operates six major production facilities across North America, Europe, and Asia, supplying approximately 36% of worldwide demand. ARLANXEO, a subsidiary of Saudi Aramco, focuses on sustainable synthetic rubber solutions, offering eco-friendly grades under its 'Eco' label. SIBUR Holding has upgraded its halobutyl rubber capacities, increasing production from 151 to 210 kilotons annually, to meet growing demand. Japanese companies like JSR Corporation and Kuraray Co., Ltd. emphasize high-purity grades for medical and food-contact applications, catering to stringent regulatory standards. These strategic initiatives reflect the industry's focus on innovation, sustainability, and capacity expansion to meet the evolving demands of end-use industries such as automotive, pharmaceuticals, and construction.
Some of the key players operating in the market are listed below:
|
Company Name |
Country of Origin |
Estimated Market Share (%) |
|
ExxonMobil Corporation |
USA |
31% |
|
LANXESS AG |
Germany |
21% |
|
SIBUR Holding |
Russia |
16% |
|
Reliance Industries Limited |
India |
9% |
|
ARLANXEO (subsidiary of Saudi Aramco) |
Netherlands |
9% |
|
JSR Corporation |
Japan |
7% |
|
Kumho Petrochemical Co., Ltd. |
South Korea |
xx% |
|
China Petrochemical Corporation (Sinopec) |
China |
xx% |
|
Goodyear Tire & Rubber Company |
USA |
xx% |
|
Huntsman International LLC |
USA |
xx% |
|
Formosa Synthetic Rubber Corporation |
Taiwan |
xx% |
|
Trelleborg AB |
Sweden |
xx% |
|
Kuraray Co., Ltd. |
Japan |
xx% |
Here are a few areas of focus covered in the competitive landscape of the market:
Recent Developments
- In May 2024, Dow Chemical unveiled an advanced butyl rubber compound with enhanced durability and lower rolling resistance, aimed at improving fuel efficiency in automotive tires. According to industry reports, this product gained rapid adoption in the North American market, contributing to a projected 8% growth in Dow’s butyl rubber segment for 2024. The innovation aligns with automotive OEMs’ sustainability goals and increasing consumer demand for eco-efficient vehicles.
- In February 2024, Lanxess AG introduced a new line of sustainable butyl rubber products designed for automotive and pharmaceutical use, incorporating recycled raw materials. This launch led to a 12% increase in Lanxess's market share in the Q1 2024 global butyl rubber market, as reported in their Q1 earnings release. The eco-friendly range addresses rising demand for greener materials, especially in the EU and North America, supporting compliance with stricter environmental regulations.
Author Credits: Rajrani Baghel
- Report ID: 7832
- Published Date: Jun 30, 2025
- Report Format: PDF, PPT
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