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Strong demand in China's market boosts global rubber prices

December 30, 2021

In 2021, the world rubber economy may have a deficit of about 200,000 tons.

The Association of Natural Rubber Producers (ANRPC) said that due to the upcoming seasonal supply shortage and increased demand in China, the price of natural rubber in the global market may rise in the short term.

 

ANRPC's rubber market intelligence report predicts that China's rubber imports will increase by January 2022. Due to seasonal supply shortages, which coincide with the winterization of rubber trees in major producing countries, Chinese manufacturers are expected to increase their natural rubber stocks before the Spring Festival holiday on February 1.

China is expected to consume about 500,000 tons in December and January 2022. The spread of the COVID-19 pandemic, the lack of power in the crude oil market and the continued deadlock in the automotive industry due to chip shortages.

 

The rubber market is expected to continue to exceed demand in the short term. Due to seasonal factors, the global rubber supply is expected to decline.

In 2021, the world rubber economy may end in a gap of about 200,000 tons (world supply: 13.828 million tons; demand: 14.076 million tons). New restrictions imposed across Europe to control the spread of COVID-19, as well as the resulting concerns about the outlook for rubber demand, may have a negative impact on the rubber futures market.

 

Santosh Kumar, executive director of Harrisons Malayalam Ltd, said that India's production was seriously affected in October and November (this is a high-yield month) due to unseasonal and heavy rains disrupting mining, limiting market supply. Should. The planting window has been shortened to December and January for up to two months.

 

However, early deciduous leaves in central and southern Kerala are worrying, because it may reduce production, because growers stop production after deciduous leaves. The problem of reduced supply is expected to keep prices tight, but prices fell in December due to increased arrivals.

He also said, "The current decline will not continue, and prices will rebound in mid-January as production declines. The weather conditions this year are very uncertain and unstable, and growers pin their hopes on rainfall and soil moisture to improve early deciduous leaves and crop growth."

(The article comes from Rubber Express)


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