Natural rubber demand estimate to improve for 2021

KUALA LUMPUR—Global demand for natural rubber is estimated to improve by 8.7 percent year-on-year to over 14.076 million metric tons in 2021, according to the latest estimate by the Association of Natural Rubber Producing Countries (ANRPC).

The figure is slightly up from the 14.028-million-ton estimate announced in October, supported by a 150,000-ton rise in demand from India, said ANRPC in its November global trends update published Dec. 24.

In addition, ANRPC noted an "unexpected pick-up" in China's factory activity in November, following the fall of raw material prices and the easing of power rationing in the country.

The development, however, is overshadowed by high shipping costs and China's zero COVID-19 policies, which the association said impose "a much stringent restriction for returning Chinese seafarers with longer mandatory quarantine and more."

This, the ANRPC said, may result in "a supply chain crisis" in near months.

"China has an impressive rebound from last year's pandemic slump, but it has lost some momentum in recovery during the second half of the year," it added.

On the supply side, the ANRPC expects global production to grow by 2.1 percent to 13.882 million tons, up from 13.836 million tons reported in October.

While the growth in global production recovered 2.3 percent growth to 1.407 million tons in November, fourth-quarter output is expected to fall marginally due to adverse weather conditions and continued COVID-19 restrictions amid the new omicron variant's outbreak.