Since January 2011, global consumption of natural rubber consumption went down, according to the Centre for Monitoring Indian Economy (CMIE). The main reason for the drop in consumption is due to the weak demand from the tyre industry. Since April 2011, the demand for rubber in the tyre industry in India has been flat to negative except for the month of September.
India’s natural rubber imports are likely to drop by 27% to 150,000 tonnes in the current year to end-March 2013. While in China, car sales from January to May this year grew just 3.2% compared to two previous two years, reflecting the slowdown in the country.
According to Hong Kong Shanghai Banking Corporation (HSBC) Flash Purchasing Managers Index, China’s industrial activity fell to a seven-month low of 48.1 in June from 48.4 in May.
In addition to all above, According to International Rubber Study Group, global rubber production is expected to be 7.8% higher to 11.8 million tonnes in 2012. all these factors weigh heavily over the price of the commodity.
Rubber for July delivery, in TOCOM, traded down 5.2 yen to 233.8 per kg and in NMCE, the price of the commodity dropped to Rs 18408 per tonne on 26th June.
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