NR price outlook ‘improves’ after sharp falls

Kuala Lumpur – Although natural rubber prices have fallen sharply since mid-February, market sentiment improved slightly by the end of March due to an improved economic outlook in the US and Europe, better-than-expected automotive sales in China and recovery in oil prices, according to the Association of Natural Rubber Producing Countries (ANRPC).

In its latest monthly report, published 7 April, the ANRPC said demand outlook for natural raubber had improved for China, particularly in view of the withdrawal of US tariffs on Chinese OTR tires.

“Improved economic outlook in the US and Europe suggests possibility of faster growth in demand for NR from these non-ANRPC regions,” the report added.

Additionally, the association anticipated a “balanced demand-supply situation” for the second quarter of this year.

The ANRPC also expects the NR market to gain from a possible improvement in crude oil prices, as OPEC is planning to extend its curtailment programme.

“Moreover, favourable trends prevailing in entire commodity markets is expected to be mirrored in NR market as well,” its report added.

In the three months to April, production by ANRPC member states rose year-on-year 2% in the three months to 2.499 million tonnes. NR consumption by member states amounted to 1.951 million tonnes – representing 78% of their total production.

During the second quarter of 2017, said ANRPC, production from member countries is expected to grow by 5.8% to 2.491 million tonnes from 2.355 million tonnes during the same quarter in the previous year.

Production is, however, expected to remain low in all countries except Indonesia, until May 2017 due to the wintering off-season which begun in February/March.