Rubber producers revise down market outlook as Covid cases rise

Kuala Lumpur – The Association of Natural Rubber Producing Countries (ANRPC) has marginally revised down the global outlook for natural rubber (NR) supply and demand in 2021, amid a resurgence of Covid cases, particularly in Europe. 

The association now expects global production to come in at 13.793 million tonnes, down from 13.799 million tonnes reported in February, according to its March monthly NR trend update. This represents a 5.7% growth year-on-year, compared with the outlook reported last month at 6.4%.

The lower projection, according to ANRPC, is due to slower anticipated production in Thailand and Sri Lanka, due to leaf fall diseases and wintering season.

In the first quarter of 2021, the world production fell by 1.7% to 2.914 million tonnes compared to the same period last year, while the production in March 2021 improved 1.3%, year-on-year, to 910,000 tonnes. 

ANRPC also lowered the outlook for NR demand to 13.571 million tonnes, slightly lower than 13.600 million tonnes reported last month. 

This, it said, was due to the resurgence of Covid-19 cases in Europe which resulted in "massive lockdowns".

Despite lowering the outlook, the association expects demand to rebound by 5.8% this year, helped by economic growth in and “huge stimulus package” from US. 

In March, global demand stood at 1.2 million tonnes, up 7.4% compared to the same period last year.  

In terms of pricing, ANRPC said the favourable market fundamental supported price growth in futures and physical markets during March, except at the Shanghai Futures Exchange.

While physical NR markets posted a downward trend in price for the month, the average prices gained further from February with positive growth ranges 21.4% in STR-20 for Bangkok, 4.1% in SMR-20 for Kuala Lumpur, 3.2% in RSS-3 for Bangkok and 6.7% in RSS-4 for Kottayam market.