18 July 2018 ( Lagos ) : Natural rubber prices have been largely subdued since the beginning of the year, due to supply overhang of the commodity stemming mostly from the previous year wherein global natural rubber ended in a surplus of ~500KMT . Further exacerbating the pressure on rubber prices was the increase in supply from Thailand, Malaysia, and Indonesia14, as the 350KMT export curb agreement, which took effect January 2018, expired on the 31st March 2018. 

On the other hand, demand slowed over the first half of 2018, owing to soft orders from China following weak auto retail sales which in turn impacted on auto and, by extension, tire production. Interestingly, over 2018, the ANRPC15 forecasts world consumption in 2018 to increase 923KMT to 14.3MMT while production is estimated to increase 816KMT to 14.2MMT which suggests a balanced demand-supply situation for 2018. However, given high inventory levels, analysts expect rubber prices to remain bearish over 2018.

Source: ARM Securities Limited

Reporting for EasyKobo on Wednesday, 18 July 2018 in Lagos, Nigeria

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