KUALA LUMPUR (Oct. 3, 2011)—A bleak outlook for the global economy means a downward turn for the world natural rubber market, according to the Association of Natural Rubber Producing Countries.
“Analysts widely believe that the present global economic situation is not as serious as compared to that in 2008,” the ANRPC said in the September issue of its newsletter, Natural Rubber Trends and Statistics.
“However, unlike in 2008, elevated fiscal deficits now constrain the U.S. and the EU in coming out with effective stimulus policies for bringing their economies to a clear recovery path,” the association said.
A sharp decrease in NR market speculation, combined with falling oil prices and weakened currencies among major NR-exporting countries, are putting bearish pressure on NR, the ANRPC said.
“Although NR's demand-supply situation has not undergone any major change, prices fell across key markets by 10 to 14 percent during the period from mid-September until the last week of the month,” the association said.
NR supplies are not as tight as producers anticipated at the beginning of 2011, according to the September ANRPC report. NR production from the nine major producing countries increased 7.5 percent in the second quarter to 2.24 million metric tons—much stronger than the 4.9 percent rate the industry predicted earlier. Production in the third quarter was 2.84 million metric tons, up 6.1 percent.
The ANRPC now anticipates total NR production for 2011 at slightly over 10 million metric tons, up 5.6 percent from 2011. Earlier, it projected a 2011 production figure of 9.96 million metric tons.
Better-than-expected production in Malaysia, China and Indonesia prompted the upward revision, the association said.
Export growth, however, may only be 0.2 percent in 2011's third quarter on a year-on-year basis, compared with 4.4 percent in the first quarter and 7.1 percent in the second, the ANRPC said.
Natural Rubber Trends & Statistics is available to subscribers for $335 annually for 12 issues. To order the publication or for more information, contact by email [email protected]