Despite its optimism on demand, Association of Natural Rubber Producing Countries (ANRPC) has rolled back its estimate of global production and consumption of natural rubber (NR) for 2020. The Kuala Lumpur-based organisation’s May estimate of NR production downsizes its own April estimate by 3,03,000 tonne.
As per the revised outlook, the world production is expected to fall by 4.7% to 13.130 million tonne during 2020.
At the same time, ANRPC’s statistical bulletin (May), released this week, highlights that the NR price has started recovering since the last week of April, driven by the reopening of economic activities across countries.
“The recovery is likely to continue, albeit at slow pace and subject to a set of risk factors, said RB Premadasa, secretary general, ANRPC, in the foreword. Market analysts at ANRPC list four reasons for “the positive sentiment” that drives the price recovery. One, the relaxing of lockdowns in several countries. Two, increasing optimism on Covid-19 vaccine. Three, increase in crude oil prices. Four, the substantial contraction in the world production estimates of NR in the first two quarters of the current year.
“However, the geopolitics centred on US response to China’s national security legislation for Hong Kong has affected market sentiments in May-end,” said Premadasa. The world consumption of NR in 2020, according to the latest ANRPC bulletin, is expected to fall 6% to 12.904 million tonne. While India has scaled down its NR consumption estimate in 2020 to 0.9 million tonne, from the 1.065 million tonne estimated in April 2020, China has slightly upscaled its consumption estimate for 2020 from 5.21 million tonne to 5.24 million tonne.