Global consumption for rubber should grow at about 5 percent a year this year and next, with demand in Asia/Pacific leading the way and North America trailing the pack, according to a new forecast.
Despite the negative effects of the war in Iraq and the SARS epidemic, demand for rubber grew about 5 percent last year, to nearly 19 million metric tons, the report by the International Rubber Study Group said. Consumption will grow 4.8 percent this year to 19.9 million tons and 5 percent in 2005 to 20.9 million tons.
Demand for natural rubber is projected to grow faster than that for synthetic rubber, 5.6 percent vs. 4.3 percent this year and 5.4 and 4.7 percent in 2005, the IRSG said. SR accounted for 58.6 percent of consumption last year, but stronger demand for NR will shrink this to 58.1 percent by 2005, the organization predicts.
The relatively high prices for NR the past few years has led to increased tapping of rubber, the IRSG said. That has resulted in an expected 9-percent jump in production this year to 8.45 million tons and will cause a 6.9-percent increase in 2005 to 9.03 million tons. As a result, supplies again will outstrip demand after consumption caught up with output last year.
Thailand continues to be the largest NR producer, accounting for 36.5 percent of global output last year. Indonesia and Malaysia rank No. 2 and 3, respectively.
NR prices have eased somewhat the past few weeks after peaking in early November. Nonetheless, NR prices finished 2003 more than 40 percent higher than they were at the beginning of the year.