KUALA LUMPUR, Malaysia (May 26, 2010)—Natural rubber prices probably will remain high because of strong supply-demand fundamentals, according to a new report from an organization of NR producers.
The Association of Natural Rubber Producing Countries said preliminary estimates for April show demand remains high in China, India and Malaysia. Consumption of rubber rose during the first four months of this year by 25.5 percent in China, 11.7 percent in India and 13.6 percent in Malaysia on annualized basis.
In China, the country accounting for about 32 percent of the global demand for NR, import of NR and NR rich grades of compound rubber increased during the period at 17.3 percent and 42.7 percent, respectively. China's consumption of NR is anticipated to rise 10.2 percent in 2010 to 3.35 million metric tons.
This trend in the three major consuming countries, said the ANRPC, supports the view that the demand for NR remains strong despite woes and worries clouding expectations for global economic recovery.
The organization said the high rates of consumption occurred despite the fact some tire manufacturers are staying away from the market, waiting for prices to fall. The ANRPC said real demand is yet to be felt in the market."
On the supply side, ANRPC said projections available from its member countries in mid-May suggest the total supply of NR from the region could rise 6.2 percent in 2010 after three consecutive years of stagnation or decline. ANRPC has 11 members, Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, the Philippines, Singapore, Sri Lanka, Thailand and Vietnam
The output growths in 2007, 2008 and 2009 were 0.2 percent, 0.0 percent and -3.6 percent respectively.