Indonesia’s rubber industry body, Indonesian Rubber Association (Gapkindo), said they are not worried about the recent decline in rubber prices as market fundamentals remain strong.
Moenarji Soedargo, Gapkindo chairman, made the comment in the wake of a weekend meeting of the main international rubber producer group, held in Indonesia.
He declined to give details of discussions at the gathering, where producers had been expected to talk about rubber prices that touched seven-month lows early this month, partly due to a slowdown in imports by top consumer China.
“Supply and demand conditions now are quite healthy, even better than two years ago,” Soedargo said.”Fundamentals are good, Gapkindo is not worried about prices.”
He added that global rubber stocks currently stood at around 2.4 million tonnes, down from more than 3 million tonnes in 2015.
“What is happening now is technical factors … are affecting market condition and putting pressure on prices,” he said, without elaborating.
Soedargo also said that Indonesian production would taper off over the next few months as part of the usual production cycle, helping tighten global supply and supporting prices. He said rubber production will gradually drop from month to month beginning July until September.