World natural-rubber consumption is set to increases this year and the next, reducing a glut and boosting prices of the commodity used in tires, according to The Rubber Economist Ltd.
“The size of rubber surplus is getting smaller,” Prachaya Jumpasut, managing director of the London-based industry adviser, said at the Global Rubber Conference in Palembang, Indonesia, today. Prices will probably climb to $3.3 a kilogram by the end 2014 on “relatively” low stock-to-consumption ratio, his presentation at the event showed.
Rubber futures traded in Tokyo rallied into a bull market in August as economic growth in China, which accounted for 35 percent of rubber consumption in 2012, rebounded from a two-quarter slowdown. Passenger-vehicle sales in the country gained the most in four months in August, according to the state-backed China Association of Automobile Manufacturers.
Global natural-rubber consumption will climb to 1.5 percent this year and 4.1 percent in 2014 from 11.04 million metric tons in 2012, said Prachaya, who last month cut his forecast for a third year of surplus to 209,000 tons in 2013 from 475,000 tons. The revision was made because of better-than-expected demand growth in Asia, where producers have reduced tapping in response to lower prices, Prachaya said in an e-mail on Sept. 10.
Thailand, Malaysia and Indonesia, representing about 70 percent of supply, reduced exports by 300,000 tons in the six months through March to boost prices. The countries failed to agree on new curbs at a meeting in June after which Thailand unilaterally extended its export restrictions for 60 days.
Futures on the Tokyo Commodity Exchange dropped to 256.5 yen a kilogram ($2,629 a ton) today, the lowest level since Aug. 8, extending this year’s losses to 15 percent. Prices gained 12 percent in the third quarter, the first such advance this year.
Source: Bloomberg
