Coronavirus pandemic to affect global natural rubber consumption
The Association of Natural Rubber Producing Countries (ANRPC) recently released a report, which sheds light on the current situation and provides forecast for natural rubber (NR) markets.
The association reports that the world produced 13.804 million tons of natural rubber in 2019, 1.4% down compared to the annual production volume in 2018, as per the updated estimates available from individual NR producing countries. Whereas the production was anticipated to increase 2.7% to 14.177 million tons in 2020, according to the revised outlook, it witnessed an annualized 5.2% drop in world production during the first two month of the year.
According to ANRPC, the world consumption of natural rubber fell by 18.6%, year-over-year, during the first two months of 2020 as China’s manufacturing has been severely disrupted following the outbreak of COVID-19 epidemic.
The Association’s report pinpoints:
“The world consumption outlook for 2020 is likely to be revised down further in view of the anticipated global economic slump arising from the COVID-19 epidemic which has already spread to around 90 countries.
“The market sentiments since mid-January have been dominated by the concerns about the impact of the virus epidemic on global economy as well as the demand outlook for NR. The last week of February has seen global stocks plummeting and investors seeking shelter in safe assets amid heightened concerns about the economic impact of the virus outbreak. Although it is early to assess the impact on the global growth outlook, forecasting models suggest that the global economic growth in 2020 could be two percentage points lower, at around 1.0%.
“As far as commodities and stocks remain fragile, speculative investors are expected to seek shelter in safe assets. The worsening state of the global economy, developments in commodities and stocks, and the demand outlook for NR, do not favour NR prices gaining strength in the short-term. A trend reversal can be expected only by the turn of the first quarter.”
ANRPC also highlights that it had received very good support from all member governments in the effort to gather the most updated estimates and forecasts. In a marked improvement from the previous months, all governments have reported the estimates and forecasts by ensuring the quality and consistency of the figures.
As a result of the disease spreading around the worlds, the ANRPC has postponed its international Training in Rubber Market Analysis and Research (R-MART 2020) which was scheduled to be held from 17 to 20 March in Bangkok. The new dates will be announced once the COVID-19 epidemic is settled. The participation is open to the private sector and non-members of ANRPC upon payment of a fee.
Press release by ANRPC.