Demand for natural rubber increases, supply decreases

World supplies of natural rubber fell 5.1% in the first four months of 2019, to 3.95 million metric tons from 4.16 million in the first four months of 2018, according to the latest figures from the Association of Natural Rubber Producing Countries.

During the same period, world NR consumption increased 1% to 4.59 million tons from 4.54 million, the ANRPC said in the April 2019 issue of Natural Rubber Trends & Statistics, which appeared June 30.

Seasonal shortages of raw material during the wintering season, together with reductions in exports under the Agreed Exports Tonnage Scheme developed by Thailand, Indonesia and Malaysia, strengthened NR prices in key markets, said ANRPC Secretary General Nguyen Ngoc Bich."Moreover, the NR prices were also supported by the possibility of an interest rate cut this year signaled by the U.S. Federal Reserve," Nguyen said.The International Rubber Study Group issued its World Rubber Industry Outlook July 16, in which the IRSG said it expected slower growth in NR demand in 2019 than 2018.

World NR demand increased by 4.2% to 13.78 million tons in 2018, according to the IRSG report. Demand growth will slow to 2.3% and 14.1 million tons in 2019, it said. Growth in 2020 will decelerate further, to 1.8%, it said.