Partial recovery awaits global rubber production

Global production of natural rubber is expecting a partial recovery after a marked decline in the first seven months of 2020, when the decline was 8.9% (to 6.7 million tons).

This was reported by the Association of Natural Rubber Manufacturing Countries (ANRPC).

After falling 1.5% in the first quarter of the year and 16.1% in the second quarter, global production of natural rubber fell by 9.5% in July. According to ANRPC, production is expected to recover in part in the third quarter amid rising commodity prices, improving demand (especially in China) and further easing of travel quarantine restrictions.

Citing data from individual producing countries, ANRPC reports that global production in the third quarter will reach 3.5 million tonnes - 1.5% less than in the third quarter of last year.

For the year as a whole, the association slightly reduced production indicators, to 13.149 million tons. This is 4.9% less than in 2019. A month earlier, ANRPC experts expected a decrease in production by 4.5% to 13.195 million tons.

The association also expects a partial recovery in natural rubber consumption in the third quarter after an overall decline of 14.0% in the first seven months of the year.

China, whose economic growth in the second quarter was 3.2%, will be a key growth factor, as consumption of natural rubber in July (456 thousand tons) - almost equal to the level of the previous year (464 thousand tons). In addition, analysts believe that the market recovery will be affected by a "faster than expected" US economic recovery and the presidential elections in November. Growth in natural rubber consumption will also be boosted by the recovery in car production and sales, especially in China, and the desire of people to travel in private cars after the Covid-19 pandemic.

For 2020 as a whole, according to forecasts, the global consumption of natural rubber will decrease to 12.5 million tons, which is 8.9% less than a year earlier. In addition, this figure is 1.6% below the August forecast by ANRPC.