Natural rubber producers revise up demand estimate

Kuala Lumpur – Global demand for natural rubber (NR) is estimated to improve by 8.7% year-on-year to over 14.076 million tonnes 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-tonne estimate announced in October, supported by a 150,000-tonne rise in demand from India, said ANRPC in its November global trends update published 24 Dec 2021.

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 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% to 13.882 million tonnes, up from 13.836 million tonnes reported in October.

While the growth in global production recovered 2.3% growth to 1.407 million tonnes in November, fourth-quarter output is expected to fall marginally due to adverse weather conditions and continued Covid restrictions amid the new Omicron variant’s outbreak.