KUALA LUMPUR, Malaysia—Although natural rubber prices have fallen sharply since mid-February, market sentiment improved slightly by the end of March due to an improved economic outlook in the U.S. and Europe, better-than-expected automotive sales in China and recovery in oil prices, according to the Association of Natural Rubber Producing Countries.
In its latest monthly report, published April 7, the ANRPC said demand for natural rubber had improved for China, particularly in view of the withdrawal of U.S. tariffs on Chinese OTR tires.
"Improved economic outlook in the U.S. and Europe suggests possibility of faster growth in demand for NR from these non-ANRPC regions," the report added.
Additionally, the association anticipated a "balanced demand-supply situation" for the second quarter of this year.
The ANRPC also expects the natural rubber market to gain from a possible improvement in crude oil prices, as OPEC is planning to extend its curtailment program.
"Moreover, favorable trends prevailing in entire commodity markets is expected to be mirrored in NR market as well," the report added.
In the three months to April, production by ANRPC member states rose by 2 percent year-on-year to nearly 2.5 million metric tons. NR consumption by member states amounted to 1.9 million tons—representing 78 percent of their total production.
ANRPC said that during the second quarter of 2017 production from member countries is expected to grow by 5.8 percent to 2.5 million tons from 2.35 million tons during the same quarter in the previous year.
Production is, however, expected to remain low in all countries except Indonesia, until May because of the wintering off-season which began in February.