Global NR Market in a state of Over-Supply, as per the latest market analysis
Since 2011, the global natural rubber market has been in a state of over-supply which reached 220,000 tons in 2011 and about 140,000 tons in 2015. Affected by the growing tapping area of natural rubber in main producing regions, the slowdown in the growth rate of the tire industry and other factors, there will still be a glut of natural rubber worldwide during 2016-2020, and the global glut will be 110,000 tons or so in 2020, according to the latest report.
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| Natural Rubber, which is used in products ranging from tyres to other industrial applications, has had the worst performance amid the slump in global commodities in the last six months. And demand for natural rubber is not expected to exceed supplies at least until 2017. Source: . |
Due to the sluggish global economic growth
and the excess supply of natural rubber, the price of natural rubber
has been hovering at a low level. As of the end of 2015, China’s natural
rubber price had fallen to around $1,140/ton, which was also the cost
price. In 2016, the global average price of natural rubber fluctuates
at $1,200-$1,500/ton. In 2015, China’s natural rubber output dropped 5.5
percent year on year to 794,200 tons. Weather factors confine China’s
natural rubber planting areas to a limited scope; plus the rubber price lingering on the cost line, more and more farmers have abandoned rubber production.
In 2016, China’s output of natural rubber is expected to further
decline by 5.3 percent to 752,100 tons.
As the world’s largest consumer,
China consumed 4.682 million tons of natural rubber in 2015, accounting
for 38.5 percent of the global total. Amid the serious imbalance
between supply and demand, China mostly imports natural rubber to meet
the additional demand. The import volume rose 4.8 percent year on year
to 2.736 million tons, while the average import price fell 24.5 percent
year on year to $1,431.6/ton in 2015. In the backdrop of the descending rubber price
and the downsized rubber plantations, China’s automobile industry has
been expanding in ownership and new increment, conducing to the
ascending rigid demand of the tire industry and the growing demand for
natural rubber. In 2016-2020, the contradiction between natural rubber
supply and demand in China will further intensify; by 2020, the gap
between supply and demand will hit about 5.142 million tons, an increase
of 32.3 percent over 2015.
Restricted by resource distribution, the natural rubber industry
is highly centralized in Thailand, Malaysia and other Southeast Asian
nations, represented by the key players such as Sri Trang Agro-Industry,
Von Bundit, Southland Rubber, Thai Rubber
Latex and Sinochem International. Given the downturn of the natural
rubber market, companies can speed up the development of resources and
strategies, increase the planting area in major producing countries as
well as enhance processing factory layout to improve production capacity
in the next years; on the other hand, they can keep an eye on
customization and high-end market applications of natural rubber, such
as military rubber tires, to heighten the gross margin and competitiveness of products.
