KUALA LUMPUR, Malaysia — World demand for natural rubber (NR) exceeded supply in the first five months of 2018, but the situation had only a marginal effect on pricing, according to the latest monthly figures from the Association of Natural Rubber Producing Countries (ANRPC).
Global NR consumption increased 6.2 percent during the period to 5.82 million metric tons over the corresponding 2017 period, the ANRPC said. During the same period, world NR supply stood at 5.25 million tons, or an increase of 7.7 percent.
The 570,000-ton shortage has helped to "partly absorb" excess availability in the market, the association noted.
Throughout the remainder of 2018, the ANRPC expects a balanced demand-supply scenario — production is forecast to increase 6.1 percent to 14.2 million tons and consumption by 6.9 percent to 14.3 million tons.
Despite the supply deficit and a sharp rally in crude oil prices in late April, NR prices strengthened only slightly during April and May, the ANRPC said.
This marginal recovery, it noted, was helped in part by the devaluation of Japanese yen, which had a positive impact on the rubber futures at TOCOM.
Sentiment in Asian commodity markets is, however, being weighed down by concerns over trade-war issues and the potential further revisions of policy interest rates by the U.S. Federal Reserve.