KOREA IS VIETNAM’S THIRD-LARGEST RUBBER EXPORT MARKET

According to the General Department of Vietnam Customs, in the first two months of 2024, Vietnam’s rubber exports to Korea reached 8.2 thousand tons, worth 12.77 million USD. This result was up 61.7% in volume and 60.3% in value over the same period in 2023. The average export price to this market was 1,577 USD/ton, down 0.9% over the same period last year.

Vietnam exports mainly natural rubber to Korea. In particular, SVR 10 was the most exported, accounting for 39.01% of total rubber exports to this market. SVR CV60 ranked second, accounting for 26.54%. The third was SVR 20, accounting for 16.55%. The export value of these types to Korea increased sharply over the same period in 2023.

The average export price of all types of rubber to Korea in the first two months of 2024 has mostly increased over the same period in 2023. Latex had the strongest increase with 7.4%; SVR CV60 6.7%; SVR CV50 6.1%; SVR 10 5.9%; and SVR 20 4.6%.

Korea is Vietnam’s third-largest rubber export market.

Korea’s tire industry depends entirely on imports of natural rubber. Synthetic rubber is produced domestically but raw materials are imported. Korea’s tire market is divided into OE (new car tires) and RE (replacement tires). The OE/RE sales ratio is about 3:7, with much greater replacement demand than new cars. In both the replacement (RE) and new vehicle (OE) markets, Hankook, Kumho, and Nexans are the three major domestic tire manufacturers, accounting for about 90% of the total South Korean tire manufacturing market.

These three tire manufacturers will expand production overseas soon. The Hankook expands its Tennessee plant in the US and Hungary. The construction is expected to be completed by 2027 and raise annual global production to 108.3 million units. Kumho plans to complete the expansion of its production plant in Vietnam within the next three years, starting from 2024, and annual global production of about 56 million units, is expected to increase to 63.1 million units/year. Nexans is preparing to build a new plant in the US.

Statistics from Korea Customs show that Thailand, Indonesia, China, Vietnam, and the US are the five largest rubber suppliers to South Korea. In particular, Korea increased rubber imports from Vietnam and the US. Meanwhile, imports from Thailand and Indonesia decreased over the same period in 2023. In the first two months of 2024, Vietnam was the fourth-largest rubber supplier to Korea with 6.09 thousand tons, worth 9.79 million USD. This result was up 29.7% in volume and 33.7% in value over the same period last year. Vietnam’s rubber market share accounts for 9.4% of South Korea’s total rubber imports, higher than 5.51% in the first two months of 2023.

Vietnam’s rubber exports to Korea are facing competition from many markets, especially from Thailand (accounting for 25.05% of South Korea’s total rubber imports) and Indonesia (accounting for 17.84% of South Korea’s total rubber imports). However, the rubber market share of Thailand and Indonesia is narrowing compared to the same period in 2023./.