Tight Supply Balances Soft Demand In NR Market

Natural rubber (NR) inventories remain tight around the world, but political unrest in the Middle East and continuing nuclear worries in Japan are balancing tight supplies with soft demand, according to the March 2011 figures from the Association of Natural Rubber Producing Countires (ANRPC).
NR prices fell drastically after the March 11 earthquake and tsunami in Japan, but recovered in two market days because of low production during the “wintering” months, according to the latest edition of the ANRPC statistical newsletter, Natural Rubber Trends & Statistics.
“However, the momentum of recovery has eased towards the end of March caused by a bearish demand outlook,” the publication said. Indeed, world markets have shown a yo-yo price pattern in the past month.
Prices on the Singapore Commodity Exchange (SICOM) for Technically Specified Rubber 20 stood at $4.92 per kilogram for June delivery on March 28. This compares with a per-kilo SICOM price for TSR 20 of $5.18 on March 2, $4 on March 16 and $5.23 on March 22.
Similarly, per-kilo SICOM prices for Rubber Smoked Sheets 3 were $6 on March 2, $4.39 on March 16, $5.58 on March 22, and $5.50 on March 28.
The ANRPC still expects 2011 NR production from member countries to increase by more than 6 percent over 2010, to 10.06 million metric tons from 9.47 million. However, it projects NR stocks to shrink in ANRPC countries early in the year, to 681,000 metric tons at the end of May 2011 from 1.128 million metric tons at the end of January 2011, because of consumption and exports outstripping production and imports.
NR exports from ANRPC countries should increase 5 percent during 2011, to 7.842 million metric tons from 7.471 million, the organization said.
ANRPC member countries—Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka, the Philippines and Cambodia—account for approximately 92 percent of world NR production, according to the organization.
(Tire Business, March 29, 2011)