NR markets to remain tight - ANRPC

ERJ staff report (DS)

Kuala Lumpur -- 2010 is proving to be unusual year for supply of natural rubber, according to the ANRPC. Global rubber supply normally eases during the Northern Hemisphere summer and tightens again in the winter. This year is seeing tight supply even in the Summer months.

The ANRPC continued, in its latest issue of 'Trends and Statistics, "The possibility for any marked improvement in supply, in the short term, is limited given the unfavourable age-structure of existing trees and climate related constraints."

On the demand side, said ANRPC, "Data and estimates available up to May 2010 reveal that the demand for natural rubber is strong in China, India and Malaysia. About 47% of the global consumption of natural rubber during 2009 was in these members of the ANRPC."

The organisation said the Chinese tyre industry by and large kept away from the market in April and May expecting for the prices to come down after the wintering off-season. That changed in June as tyremakers sought rubber to use in their factories. ANRPC said, "The primary concern of the consuming industry has now been shifted to availability of natural rubber rather than price."

On the supply side, ANRPC said production is not growing as fast as it anticipated. "Forecasts based on preliminary estimates and reports available up to mid-June, point to a 5.2% growth, lower than the 6.3% rate anticipated in March and 6.1% rate anticipated in May."

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