ANRPC observes decline in world’s natural rubber demand and supply
The Association of Natural Rubber Producing Countries (ANRPC) released its monthly report where it says the world production of natural rubber (NR) contracted at 8.3%, year-over-year, to 11.376 million tons during the first 11 months of 2020 (January – November) and likely to fall by 8.9%, year-over-year, for December 2020. The outlook “Natural Rubber Trends & Statistics December 2020” says that the supply in 2020 is revised upward by 81,000 tons to 12.678 million tons compared to the outlook presented in the last issue. While the world production is anticipated to recover in January 2021 by producing about 1.192 million tons of NR against 1.056 million tons in January 2020.
The world consumption of NR posted a fall of 7.9%, year-over-year, to 11.660 million tons during January 2020 to November 2020, while the remaining month of 2020 (December) is likely to recover at 3.6% to 1.167 million tons. The revised outlook in 2020 is attributed to a marginal increase of 16,000 tons to 12.827 million against the outlook reported in the last issue. The world consumption is anticipated to sustain the positive growth in January 2021 at 15.5% to 1.172 million tons against 1.015 million tons in January 2020.
ANRPC says that the recovery on prices of NR spotted across physical markets during December 2020. Despite uncertainty and unprecedented events happened in 2020, the average NR prices of SMR-20 closed at US$1.57 per kg in December 2020, improved from US$1.56 per kg recorded in November 2020. For STR-20, the average monthly price in December 2020 recovered from US$1.58 per kg in November 2020 to US$1.60 per kg. Both average prices of rubber sheets namely RSS-3 in Bangkok and RSS-4 in Kottayam have posted 1.2% growth and 2.5% growth in December 2020 while comparing to November 2020, respectively. A weaker US dollar and uptrend in Brent crude prices are favorable to NR market.
2020 has been a rough year to the world following an unprecedented hit by Covid-19 pandemic. The pandemic not only caused a heavy toll of deaths and illness, also dampened economic activities in the world for a prolonged period. The global economy is seeing some light at the end of the tunnel with expectation over China’s economic outlook leading the global recovery from the impact of Covid-19 with its robust export growth, strong government spending and low infection rate. The World Bank has recently released its forecast growth for the world economy to expand by 4.0% in 2021, recover from a contraction of 4.3% in 2020.
ANRPC predicts that a vaccine-led economy will be a game changer to sustain the recovery from pandemic-hit economy globally. However, containment measure is also essential to set a foundation for robust growth amid challenges in public health, debt management, budget policies and structural reforms in respective countries.
Original article by ANRPC.