NR prices to remain high on fundamentals - ANRPC

ERJ staff report (DS)

Kuala Lumpur -- NR prices are likely to remain high in the mid-term,based on strong demand-supply fundamentals, according to the latest report from the Association of Natural Rubber Producing Countries (ANRPC).

The ANRPC said Preliminary estimates available up to April reveal that the demand remains strong in China, India and

Malaysia. Consumption of natural rubber rose during the first four months of this year by 25.5 percent in China, 11.7 percent in India and 13.6 percent in Malaysia on annualised basis.

In China, the country accounting for about 32 percent

of the global demand for NR, import of NR and NR rich

grades of compound rubber increased during the

period at 17.3 percent and 42.7 percent annualised rates

respectively. China's consumption of NR is anticipated

to rise 10.2 percent in 2010 to 3.35 million tonnes.

This trend in the three major consuming

countries, said the ANRPC, supports the view that the

demand for natural rubber remains strong despite

woes and worries clouding expectations for global

economic recovery.

ANRPC added, "It is striking to notice that these

robust rates have been attained in spite of a section

of tyre manufacturing industry staying away from the

market expecting a lower price after the wintering

season. This means that the real demand is yet to

be felt in the market."

On the supply side, ANRPC said projections available from Member Governments in

mid-May suggest that the total supply of NR from the

ANRPC region could rise 6.2 percent in 2010 after three

consecutive years of stagnation or decline.

The

output growths in 2007, 2008 and 2009 were 0.2 percent ,

0.0 percent and -3.6 percent respectively. The total output of 9.369 million tonnes anticipated for this year is up by

2.4 percent only compared to that before three years (2007).

In other words, the average annual growth during the

period 2007-10 comes to 0.8 percent only.

It follows from the above that a tightness being felt in

the market, even after the wintering season, is the

cumulative effect carried from 2007 onwards. The ANRPC noted that the supply behaviour from 2007 to date closely agrees with the views ANRPC

presented at the IBC Asia's Rubber Market 2007

(Singapore, October 2007) and the ASEAN Rubber

Conference 2008 (Manila, June 2008) based on

historical planting trends and age structure of trees.

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DownloadNatural Rubber Trends & Statistics May 2010 from ANRPC