KUALA LUMPUR—Natural rubber prices are expected to gain strength in the short term, supported largely by increasing demand from China and India, according to the Association of Natural Rubber Producing Countries.
"There are valid observations supporting the view that manufacturing activities in China have come back to life by generating enormous demand for raw materials," according to the latest ANRPC bi-weekly market intelligence report on July 20.
The total inventory of NR held in the Qingdao warehouses decreased by 150,000 metric tons over May and June, indicating "China's imminent active presence in the market."
Helped by lifting of restrictions in several states, manufacturing activities in India are also expected to recover and gain momentum in the remaining months of the year, ANRPC said.
The resumption of manufacturing activities across the U.S. and Europe also is expected to push up demand from those regions.
ANRPC warned that risk factors, such as the global spread of the delta variant of the COVID-19 virus, could cloud positive market sentiment.
Furthermore, the anticipated increased supply of natural rubber in July and August likely will negatively impact prices, the association added.