According to the Association of Natural Rubber Producing Countries (ANRPC), during first half of 2018 (H1 2018), the global demand of natural rubber (NR) grew 5%, year-on-year, to 6.96 million tonnes. Meanwhile, the global supply of NR rose 4.5%, year-on-year, to 6.214 million tonnes during the same reference period. These figures reveal a shortfall in production amounting to 746,000 tonnes during H1 2018.
In view of these updates, ANPRC has revised the outlook of NR for 2018 and the world production is anticipated to increase by 5.2% to 14.04 million tonnes and the world demand to increase by 5.7% to 14.136 million tonnes.
However, the Kuala Lumpur-headquartered association says the favourable supply-demand fundamentals in NR market was not reflected in the physical nor futures rubber markets in June 2018. These markets seem to be influenced by external factors such as development in the crude oil industry and the trade tensions between US and China.
Moreover, rubber prices at the Shanghai Futures Exchange have been bearish due to various reasons including the sharp devaluation in Chinese yuan since April and the high level of rubber inventory held at its designated warehouses. This has kept sentiments down in physical markets across countries.