KUALA LUMPUR, Malaysia — Although natural rubber prices have fallen sharply since mid-February, market sentiment improved slightly by the end of March due to an improved economic outlook in the U.S. and Europe, better-than-expected automotive sales in China and recovery in oil prices, according to the Association of Natural Rubber Producing Countries (ANRPC).
“Improved economic outlook in the U.S. and Europe suggests possibility of faster growth in demand for NR from these non-ANRPC regions,” the report added. Additionally, the association anticipated a “balanced demand-supply situation” for the second quarter of this year.
The ANRPC also expects the NR market to gain from a possible improvement in crude oil prices, as the Organization of the Petroleum Exporting Countries (OPEC) is planning to extend its curtailment program.
“Moreover, favorable trends prevailing in entire commodity markets is expected to be mirrored in NR market as well,” the ANRPC report added.
In the three months to April, production by ANRPC member states rose by 2 percent year-on-year to 2.499 million metric tons. NR consumption by member states amounted to 1.951 million tons — representing 78 percent of their total production.
During the second quarter of 2017, production from ANRPC member countries is expected to grow by 5.8 percent to 2.491 million tons from 2.355 million tons during the same quarter in the previous year, the association said.
Production is, however, expected to remain low in all countries except Indonesia, until May due to the wintering off-season which begun in February/March.