According to the July report of the Association of Natural Rubber Producing Countries (ANRPC), there is a weak possibility of natural rubber (NR) demand gaining strength in 2016 or 2017. The ANRPC accounts for 90% of the world’s NR supply.
The reduced growth in worldwide NR supply due to various dominant factors has not given the market a chance to gain traction. Some of these factors include the uncertainty overshadowing the global economy after Brexit as well as geopolitical tension and terrorism affecting several economies, especially in the Middle East, with cross-border complications.
ANRPC secretary-general Sheela Thomas said, “The expected weak demand outlook is likely to hold back the anticipated slow growth in supply from translating to a bullish market. Besides short term energy outlook suggests that NR market may continue lacking support from crude oil.”
It is estimated that total NR production during the seventh month (ended July 2016) is at 5.899 million tonnes, showing a 0.2% year-on-year increase. Production went up in Thailand, Indonesia and Vietnam while production in China, Malaysia and India fell.
ANRPC countries saw a 4.4% year-on-year increase in consumption with 4.7 million tonnes for the seventh month period.
From August to October 2016, a slightly slower growth in consumption is expected, taking into account post-Brexit global uncertainties and downscaled economic scenario by the International Monetary Fund (IMF), ANRPC said.