Study predicts NR prices may continue to rise

LONDON (Aug. 12)—Strengthening Asian markets are boosting demand for natural rubber and providing impetus for higher prices, according to a market research company. The Economist Intelligence Unit in its latest quarterly review of global commodity markets noted spot RSS1 prices in Kuala Lumpur, Malaysia, have risen by 18 percent in recent months. Among the key market drivers, London-based EIU cited figures from China's National Petrochemical Association, which suggest that growth in Chinese consumption has continued ahead of expectations, and that Japanese demand also is on the rise. In terms of the supply/demand balance, the International Rubber Study Group has revised its estimates in favor of producers, lowering stocks in 2001 from 17 to 15 days' supply. However, supply will continue to run slightly ahead of demand this year before falling behind in 2003 and even further in 2004, EIU forecast.