KUALA LUMPUR, Malaysia—After a tough start to the year, world production of natural rubber is set for a partial recovery in the third quarter.
NR registered an 8.9 percent decline to 6.7 million metric tons during the first seven months of 2020, according to the Association of Natural Rubber Producing Countries.
Following a 1.5 percent fall in the first quarter and a 16.1 percent fall in the second quarter, the global NR output declined 9.5 percent in July 2020, ANRPC said in its monthly update on Sept. 10.
Production, it said, is anticipated to recover partly during the third quarter on account of the continuing recovery in NR prices, improving demand—especially from China—and further relaxation in movement restrictions.
Citing figures by individual producing countries, ANRPC said the world output is expected to reach 3.5 million tons in the third quarter, down 1.5 percent from the same quarter last year.
For the full year, the association slightly revised down production figures to 13.149 million tons, representing a 4.9 percent fall from the previous year. The figure also reflects a decline from ANRPC's forecast a month ago, which anticipated a 4.5 percent decline in production to 13.195 million tons.
The association also expects a partial recovery in the consumption of NR in the third quarter, after an overall 14.0 percent decline in the first seven months of the year.
China, which posted a 3.2 percent economic growth in the second quarter, will be the key driver as consumption in July—at 456,000 tons—nearly matched the previous year's level of 464,000 tons.
Other contributing factors will be a "faster-than-expected" recovery in the U.S. economy and the presidential elections in November.
A rebound in vehicles production and sales, especially in China, and a preference for traveling by personal vehicle in the wake of COVID-19, also will help drive consumption.
The ANRPC expects demand to decline 2.9 percent during the third quarter, with "marked improvement" compared to the 15.0 percent and 15.8 percent declines posted in the first and second quarters, respectively.
For the full year, consumption rates have been revised down to 12.5 million tons, down 8.9 percent year-on-year. The figure also reflects a 1.6 percent drop compared to ANRPC's outlook reported last month, which anticipated demand to come in at 12.75 million tons in 2020.