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August 07, 2020 10:19 AM

Natural Rubber consumption set for increase

European Rubber Journal Report
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    KUALA LUMPUR, Malaysia—After seven months of decline, the natural rubber market appears set for a small rebound.

    The Association of Natural Rubber Producing Countries said recently that the natural rubber demand should increase by about 2.6 percent in the current quarter, set to end Oct. 31. The uptick, the association said, primarily is driven by China and the U.S., both of which have seen some economic revitalization in the wake of the COVID-19 slowdowns.

    In particular, demand in China has increased as new initiatives fall into place along with some "earlier than expected" economy recovery, ANRPC said in its monthly NR update, published Aug. 6. The country emerged from the COVID-19 downturn with 3.2 percent economic growth in the second quarter, according to that report.

    China also has scaled up its outlook on the consumption of NR for 2020 to 5.04 million metric tons, up from the 4.93 million tons it had reported in July.

    This increase in demand from China is offset by falling demand in Malaysia. Growing demand for nitrile rubber gloves, which are preferred in the fight against the coronavirus, is a major driver for Malaysian NR demand. The NR outlook for that country has fallen to 522,000 tons from the 603,000 tons reported last month.

    As a result of the revisions across the globe, ANRPC's outlook for 2020 demand is up marginally to 12.75 million tons from 12.67 million tons anticipated a month ago. The revised outlook represents a 7.3 percent decrease from the previous year.

    During the first six months of the year, NR demand fell 15 percent to 5.91 million tons, according to ANRPC data.

    The outlook for NR production remained unchanged at the end of July, with full year output estimated to decline 4.5 percent to 13.195 million tons in 2020.

    In the first six months of the year, the global production of NR fell 6.8 percent to 5.67 million tons, and ANRPC expects a further 2.4 percent decline in production during the four months to the end of October.

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