TRAVERSE CITY, Mich. (Aug. 10) — Rubber prices, which have hit 20-year highs this summer, will continue to rise through 2006, according to analysts speaking at the 2006 Management Briefing Seminars in Traverse City, Mich.
According to the Economist Intelligence Unit, the average price for RSS1, the most common type of natural rubber used in tires, hit $2,500 a metric ton — about $1.13 a pound — on July 20, up from $2,380 per ton in the second quarter and $1,864 per ton in the fourth quarter of 2005, according to Kona Haque, chief commodities analyst at EIU.
Whitney Luckett, vice president of sales and marketing with RCMA Americas Inc., said Chinese demand was much higher than expected. She expects prices to consolidate and rise slightly by year-end.
Luckett predicts year-end prices for natural rubber won´t be near what they were Jan. 1. She said higher prices are a consequence of the demand in China, along with a limited supply of the tree-grown commodity. But rubber can be highly influenced by anything from rains in Asia to air quality, she said.
Haque predicts natural rubber prices will continue their climb through 2006 and 2007, rising to perhaps as high as $2,700 a ton by year-end and staying high through 2008 before demand begins slowing and production increases. She added that prices for synthetic rubber are rising as well because of high petroleum prices, the main raw material used in synthetic rubber.