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ANRPC : ANRPC report: Improved fundamentals fail to lift rubber prices
(Last Updated: 31 Jul 2018)

 

 

 

ANRPC report: Improved fundamentals fail to lift rubber prices

Kuala Lumpur – Global demand for natural rubber () grew 5% year-on-year to 6.96 million tonnes in the first half of 2018, according to the Association of Natural Rubber Producing Countries (ANRPC).

In the six months to end of June, supply of natural rubber rose 4.5%, to 6.214 million tonnes, leaving a shortfall in production of 746,000 tonnes, ANRPC’s latest figures show.

In its 30 July monthly update, the association also revised its full-year market outlook: production now anticipated to increase 5.2% to 14.040 million tonnes, and demand to rise 5.7% to 14.136 million tonnes.

As for NR prices in June, the ANRPC said the “favourable supply-demand fundamentals” in NR market was not reflected in the physical nor futures .

 

The markets, it noted, were influenced by external factors such as the development in the crude  industry and the trade tensions between  and .

According to ANRPC, prices at the Shanghai Futures Exchange have been bearish, partly due to the sharp devaluation in Chinese yuan since April and a high level of rubber inventories.

 

ANRPC Releases Natural Rubber Trends & Statistics, May 2018

The Association of  Producing Countries (ANRPC) is happy to release the Natural Rubber Trends & Statistics, May 2018.

The world consumption of natural rubber increased by 6.2%, year-over-year, to 5.822 million tonnes during the period from January to May 2018. During the same period, the world supply rose 7.7%, year-over-year, to 5.252 million tonnes.  These figures reveal that the production has fallen short of the consumption by 570,000 tonnes during the first five months of the current year.  This has helped to partly absorb the excess availability in the market.  During the year 2018, the world production is anticipated to increase by 6.1% to 14.150 million tonnes and the world consumption to increase 6.9% to 14.300 million tonnes.  The emerging scenario suggests a balanced demand-supply situation during 2018.

Although the period from the end of April has witnessed a sharp rally in  prices, failed to fuel a corresponding uptrend in natural rubber market. However, rubber prices performed marginally better during May 2018 as compared to April 2018. The marginal recovery was partly helped by the devaluation of  which had a positive impact on the rubber  at TOCOM.

The concerns over widening trade-war issues and the potential further revisions of policy interest rates by the US  keep sentiments down in most of the Asian commodities and natural rubber is no exception. More specifically, natural rubber market remains clouded by uncertainties largely due to factors external to the sector.

 The analysis and data given in this publication could help to closely understand the prevailing situation in the market and the emerging scenario. ANRPC owes a debt of gratitude to its statistical correspondents in the member countries and the esteemed users of this publication.

Thank you.


Dr. Nguyen Ngoc Bich

Secretary-General, ANRPC

 

Natural Rubber supply deficit fails to rekindle market

KUALA LUMPUR—World demand for natural rubber exceeded supply in the first five months of 2018, but the situation only had a marginal effect on pricing, according to the latest monthly figures from the Association of Natural Rubber Producing Countries.

Global NR consumption increased 6.2 percent during the period to 5.82 million metric tons over the corresponding 2017 period, the ANRPC said. During the same period, world NR supply stood at 5.25 million tons, or an increase of 7.7 percent.

The 570,000-ton shortage has helped to "partly absorb" excess availability in the market, the association noted.

Throughout the remainder of 2018, the ANRPC expects a balanced demand-supply scenario—production is forecast to increase 6.1 percent to 14.2 million tons and consumption by 6.9 percent to 14.3 million tons.

Despite the supply deficit and a sharp rally in crude oil prices in late April, NR prices strengthened only slightly during April and May, the ANRPC said. This marginal recovery, it noted, was helped in part by the devaluation of Japanese yen, which had a positive impact on the rubber futures at TOCOM.

Sentiment in Asian commodity markets is, however, being weighed down by concerns over trade-war issues and the potential further revisions of policy interest rates by the U.S. Federal Reserve.

 

 
 

 

ANRPC: China, India set to drive up Natural Rubber consumption

24 May 2018

 Kula Lumpur – Growth in demand in  and China is set to rekindle global consumption of natural , the Association of Natural  Producing Countries (ANRPC) has forecast.

In its monthly review of the market, released 24 May, the ANRPC said worldwide consumption is anticipated to grow “faster than what was expected until a month ago.”

The outlook on consumption during 2018 has been substantially scaled up in the case of China and India, said the association.

The two countries jointly contribute to around 48% of global NR consumption.

 Based on the revised outlook, consumption in China is expected to rise by 6.2% to 5.7 million tonnes – as against a 0.6% fall anticipated until a month ago.

In India, the revised outlook suggests consumption rising by 10.9% to 1.2 million tonnes during 2018. This compares with growth of 6.8% expected just a month ago.

“The revised scenario implies that a quantity of 790,000 tonnes will be additionally consumed in the two countries as compared to the scenario expected a month ago,” ANRPC commented.

The association also reported a “better-than-expected performance” during the first  of 2018, heralding an improved outlook for the full year.

During the first four months, world consumption of NR increased by 5.5% year-on-year to 4.6 million tonnes.  Production increased 2.6% to 4.0 million tonnes during the same period.

For 2018, global production of natural rubber is expected to reach 14.2 million tonnes, 6.4% higher than the year before. Consumption, similarly, is set to grow 6.4% to 14.3 million tonnes, the ANRPC said.

“The above favourable developments in the demand-supply fundamentals have helped the market to register a marginal recovery despite the unfavourable conditions,” the association further noted.

Unfavourable conditions, according to ANRPC, were caused by the US-China trade tensions, high level of inventory held at the designated warehouses of the Shanghai Exchange and volatile exchange rates.

Market sentiment has been partly benefited by the seasonal low supply, coinciding with the leaf-shedding of rubber trees.

Furthermore, said the association, India has down-scaled its production outlook for 2018 by 99,000 tonnes to 720,000 tonnes. This follows a 11.4% fall in output during the first four months of the year.

Harvesting will likely be disrupted in India and  from June to August due the southwest monsoon expected to set in by the end of May, added ANRPC.

 

 

 

 

 

 

Global demand for rubber seen up on faster economic growth

ARAVINDAN

JOM JACOB, Senior Economist, Association of Natural Rubber Producing Countries

Offtake expected to grow slightly faster this year in the US, EU and India: ANRPC official

KOTTAYAM, MARCH 1

The rubber producers globally have been faced with challenges such as low prices, lower yields per hectare and now changing climate among others in countries including India. In an e-mail interview with BusinessLine, Jom Jacob, Senior Economist, Association of Natural Rubber Producing Countries (ANRPC), Kuala Lumpur, says the emerging demand-supply scenario may turn in favour of prices during April-September, though excess supply is seen from October onwards. Edited excerpts:

Do you expect a rebound in global demand for natural rubber during 2018 in the context of faster economic growth anticipated in the US, Europe, India, and a few other major rubber consuming countries?

Global demand for natural rubber during 2018 is expected at 13.33 million tonnes (mt) — up 2.8 per cent from the previous year. This represents a faster growth.

Global consumption grew only by 1.9 per cent during 2017 to 12.9 mt, as per preliminary estimates. Compared to 2017, consumption is anticipated to grow a tad faster this year in the US, EU and India driven by the expected improved economic situation. In China, the consumption is anticipated to grow only by 0.2 per cent in 2018 after the 0.8 per cent fall in 2017.

A long period of low rubber prices should have affected the production sector. What is the outlook for global supply during 2018?

Constrained by the continued low rubber prices coupled with a host of other limiting factors, the yield per hectare is unlikely to improve during the current year.

This is despite rubber research institutes across countries commercially launching improved clones.

Unfavourable prices and lack of resources have compelled majority of smallholders to abstain from proper maintenance of holdings over the past four years, with variation across countries.

This is likely to reflect on the yield potential. However, this factor may be less serious in Vietnam, China and Cambodia where large plantation companies occupy a significant portion of rubber area.

Secondly, the trees which have newly opened for tapping during the past couple of years, are mostly in non-traditional regions.

Due to agro-climatic constraints, the yield potential is relatively low in non-traditional regions. Another factor is the potential adverse effect of climate change which is increasingly being observed over the past few years.

In a few producing countries, farmers have reportedly failed in giving adequate attention to the selection of planting materials.

On the other side, mature area is expected to expand substantially during the current year (2018). Across countries, farmers cultivated rubber lured by attractive prices prevailed during 2010-12.The trees planted 6-8 years ago have now completed the gestation phase. Total area occupied by mature trees in the 12 ANRPC member countries was originally expected to increase by 387,000 hectares during the year.

But the Thailand government is now promoting a shift from rubber to other crops by offering farmers incentives at the rate of about $3,300/ha.

Consequent to this initiative, the expansion of mature area will be much lower than expected.

Global production during 2018 is seen at 13.885 mt, up 5.2 per cent from the previous year. This represents a slightly slower growth compared to 2017.

As per preliminary estimates, global production rose during 2017 by 6.2 per cent to 13.2 mt.

The above figures of supply and demand closely match each other. Does this indicate possibility of prices bouncing back?

Based on the anticipated figures, the world supply during the current year will be in excess by around 460,000 tonnes which is only 3.5 per cent of the world demand. If examined on monthly basis, the anticipated demand-supply position is expected to turn in favour of the prices during the period from April to September 2018. But, excess supply is anticipated from October onwards.

If prices turn attractive, farmers are expected to make advantage of it by adopting various short-term measures to increase the output. The resultant increase in supply can pull back the market from making substantial recovery.

Due to a more influential role played by speculative funds, rubber prices need not always move in line with demand and supply. Crude oil market also has a bearing on natural rubber market. Moreover, the factors concerning commodity markets, in general, are applicable to natural rubber as well.

Therefore, rubber is expected to track, at least partly, the general trends in commodities rather than confining to factors within the sector. In short, one cannot make realistic judgement on the natural rubber prices by looking into supply and demand alone.

When you say, crude oil prices have a bearing on natural rubber prices, why the rubber market did not respond to the rally in crude oil during January 2018?

The ups and downs in crude oil market need not always reflect on natural rubber market. It is largely in speculation that crude oil trends often get reflected on natural rubber market.

As synthetic rubber is petroleum-derived, a rise in crude oil can make synthetic rubber more expensive. Taking this into account, investors in rubber futures often speculate on possible substitution from synthetic rubber to natural rubber.

But, this need not always happen, especially when investors are over-cautious on the influence of other more potential factors.

Speculative investors in Shanghai exchange are over-sensitive to the level of inventory held in designated warehouses.

Investors tend to over-react even to marginal increases in the inventory at Shanghai. Natural rubber inventory went up to 397,000 tonnes at the beginning of January 2018 compared to 299,000 tonnes at the same point of time a year ago. The inventory has gone up further during January 2018 and reached 419,000 tonnes by the end of the month.

The first two weeks of February 2018 have seen the inventory going up further.

Published on March 01, 2018

 

 

 

 

 

 

 

 

Natural rubber market struggles

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The natural  is anticipated to continue struggling due to plunging prices, according to the Association of Natural Rubber Producing Countries ().

 

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A worker of Cu Mgar Rubber Company harvests latex.

At its 10th annual meeting in HCM City on Monday, ARNPC said the global natural rubber market has been facing difficulties since 2012 when prices started to dip, affecting the lives of more than six million rubber growers.

The decline in prices was attributed to the imbalance in supply and demand, which originated from a typical cultivation cycle of perennial plants and weakening global industrial production.

Since the end of 2016, natural  have recovered slightly but continue to lack stability, the association said.

According to A.Ajith Kumar, ANRPC’s president, rubber prices will continue to hover at low .

He said solutions to support rubber growers were just temporary to overcome the period of low prices.

Tran Ngoc Thuan, president of the Viet Nam Rubber Association, said to cope with the period of low prices, which could prolong for several coming years, Viet Nam was striving to improve output and land use efficiency, cut costs and enhance quality, along with developing the rubber processing industry.

In addition, promoting the use of  was also important, Thuan said.

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said the Government of Viet Nam had increased domestic consumption of rubber from 18 per cent to more than 30 per cent and developed rubber processing to support the industry towards sustainable development.

There were more than 13.5 million hectares of rubber in the world, of which the 12 member countries of ANRPC accounted for 90 per cent.

The global demand for rubber was forecast to increase by 1.2 per cent to reach 12.38 million tonnes this year, while the global supply would be some 12.88 million tonnes.

Thailand, Malaysia,  and Viet Nam are the world’s largest rubber producers with total output making up for nearly 80 per cent of the global output.

Statistics of the General Department of Customs showed that in the first nine months of this year, Viet Nam’s rubber exports reached more than 955,680 tonnes, worth $1.6 billion, representing increases of 10.6 per cent in volume and 49.2 per cent in value over the same period last year.

The country also spent $802.3 million in importing more than 392,455 tonnes of rubber in the nine-month period.

A report by the Ministry of Agriculture and Rural Development showed that in 2017, Viet Nam’s rubber output rose by 3.9 per cent.

Rubber latex was at some VND12,500 per kilo in September. — VNS

 

 

 

ANRPC: The Demand Increased Slightly, and the Supply Shortages Will Be Narrowed

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 According to the statistics released by Association of  Producing Countries (), the demand volume for  worldwide (including non-ANRPC countries) reached 7,486kt in the first 7 months of 2017, up 0.40% from the same period last year. The consumption volume was 6,838kt in the first 7 months. The supply shortage was 648kt. was predicted that the  supply shortage would drop to 517kt in August.

In the first 10 months, the NR consumption volume will reach 10,723kt, up 1.10% from the same period in 2016. The consumption volume in entire 2017 will be 12,833kt, up 1.20% from the 12,600kt in 2016.

Nguyen Ngoc Bich, Chairman of ANRPC, said that NR spot prices would not decrease because of the favorable short supply. The NR price rebounded gradually in the first 3 weeks of July, followed by the price recover of crude oil. The price spread between STR 20 and SMR 20 narrowed. However, the NR inventories increased in the futures market in the last week of July, and the NR prices were influenced. The NR prices slumped in the major spot markets in  and Malaysia.

In order to promote the use of NR, Thai government encouraged all industries in Thailand to use NR. Some departments and government divisions were suggested to consume NR. After that, the NR consumption volume in Thailand increased from 362kt to 390kt, up 7.70%. Office of Thai Prime Minister announced that 9 government divisions would purchase NR for road construction and product manufacturing with a budget of 16,900,000 . It may stimulate the demand for NR in Thailand.

  • Sci99.com

 

 

Natural Rubber alternatives ‘not any time soon’

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 Washington –  Alternative sources of natural rubber sources, such as guayule and Kok-saghyz dandelions, will be important, but not for the next several years, according to the consensus of experts in this area.cheap replica watches

“Alternative NR sources such as guayule and Russian dandelion are not probably going to affect demand and supply for Hevea very soon,” Nguyen Ngoc Bich, secretary general of the Association of Natural Rubber Producing Countries () believes.

“It is good news that we will have reserves of NR for the future beside that from Hevea,” he said. “Nevertheless, research and development may still be ahead to enable the sustainable production as well as the economic viability of NR from those plants.”

The  obtains at least 90% of its NR from , so sources from other areas are extremely desirable, according to the anonymous source. But it will be five to 10 years minimum before guayule, dandelions and other alternative NR sources make an impact in the market.