KUALA LUMPUR (April 29, 2010)—A rapid global economic recovery, causing natural rubber demand to increase faster than expected, will offset projected moderate growth in NR supply to keep rubber prices high in the short and medium terms, according to a new report.
The Association of Natural Rubber Producing Countries—Thailand, Indonesia, Malaysia, China, India, Vietnam, Sri Lanka and Cambodia—show NR production by the eight members reached 8.82 million metric tons in 2009, according to the April issue of Natural Rubber Trends & Statistics. Although Thailand hasn't issued its official 2010 forecast yet, the ANRPC expects NR production to climb 6.2 percent this year, to 9.37 million metric tons.
However, the ANRPC said, this is offset by sharp increases in NR consumption in China, India and Malaysia in January-March 2010 compared with the same three months in 2009. In China alone, NR use increased 27.9 percent in the three-month period, to 729,000 tons from 570,000.
“The demand is likely to receive a further boost as a section of the tire manufacturing industry which stayed away from the market enters the market after April,” the ANRPC report said.
NR prices grew along with demand in the early part of 2010, the ANRPC said. Standard Malaysian Rubber 20 prices in Kuala Lumpur rose from $3.11 per kilogram March 16 to $3.36 per kilo April 15, while Standard Thai Rubber 20 prices in Bangkok went from $3.24 per kilo March 16 to $3.58 April 21. Rubber smoked sheets saw the biggest increases; RSS 3 in Singapore increased from $3.27 per kilo March 16 to $4.13 per kilo April 21.