Natural rubber enters 'demand-driven bullish phase'
Tuesday, 23 March 2010
BEIJING, March 22 (Bloomberg): The global natural rubber market has entered a "demand-driven bullish phase" as buyers led by China boost imports to meet rising tire demand, the Association of Natural Rubber Producing Countries said.
A target of 6 per cent growth in world supply this year may not be met because of drought in major producing nations, the group, which represents countries accounting for 94 per cent of global rubber production, said in a newsletter.
Rubber, used in tires and gloves, doubled in price last year as China overtook the US as the world's largest auto market, boosting vehicle sales by more than 40 per cent. China is the world's largest rubber consumer.
"The March scenario is very different from what was forecast earlier and there will be some negative impact on output because of the drought," Jom Jacob, senior economist at the association, said in a phone interview from Kuala Lumpur today. "Demand is very high in major consuming nations."
Rubber for August delivery gained as much as 1.5 per cent to 289.8 yen per kilogram ($3,202 a tonne) on the Tokyo Commodity Exchange before settling at 289.1 yen on March 19. The market is closed today for a holiday.
Expansion in output may be limited by "the severity of drought" in major producing countries, the association said. Production may gain to 9.54 million tonnes this year, according to a survey of member countries early this month, the association said. That compares with an International Rubber Study Group forecast last week of as much as 10.6 million tonnes.
"Preliminary estimates of imports and consumption in January and February for China, India and Malaysia are clear evidence of buoyant demand," the association said. Chinese imports of natural rubber surged 63 per cent in the first two months of this year, while Malaysia boosted imports by 34 per cent, it said.
China's compound rubber imports more than doubled to 127,000 tonnes in the first two months of this year, while natural rubber imports climbed to 267,000 tonnes, the association said.
A target of 6 per cent growth in world supply this year may not be met because of drought in major producing nations, the group, which represents countries accounting for 94 per cent of global rubber production, said in a newsletter.
Rubber, used in tires and gloves, doubled in price last year as China overtook the US as the world's largest auto market, boosting vehicle sales by more than 40 per cent. China is the world's largest rubber consumer.
"The March scenario is very different from what was forecast earlier and there will be some negative impact on output because of the drought," Jom Jacob, senior economist at the association, said in a phone interview from Kuala Lumpur today. "Demand is very high in major consuming nations."
Rubber for August delivery gained as much as 1.5 per cent to 289.8 yen per kilogram ($3,202 a tonne) on the Tokyo Commodity Exchange before settling at 289.1 yen on March 19. The market is closed today for a holiday.
Expansion in output may be limited by "the severity of drought" in major producing countries, the association said. Production may gain to 9.54 million tonnes this year, according to a survey of member countries early this month, the association said. That compares with an International Rubber Study Group forecast last week of as much as 10.6 million tonnes.
"Preliminary estimates of imports and consumption in January and February for China, India and Malaysia are clear evidence of buoyant demand," the association said. Chinese imports of natural rubber surged 63 per cent in the first two months of this year, while Malaysia boosted imports by 34 per cent, it said.
China's compound rubber imports more than doubled to 127,000 tonnes in the first two months of this year, while natural rubber imports climbed to 267,000 tonnes, the association said.