KUALA LUMPUR, Malaysia — Demand for natural rubber (NR) is set to increase 2.6% in the three months to end of October, following seven months of consecutive declines, according to the latest data by the Association of Natural Rubber Producing Countries (ANRPC).
The trend will be driven primarily by U.S. economic revitalization initiatives and by demand from China, which emerged from COVID-19 downturn, with a 3.2% second quarter growth in economy, the ANRPC said in its most recently monthly NR update.
Following the "earlier-than-expected" recovery, China has scaled up its outlook on the consumption of NR for 2020 to 5 million metric tons from 4.93million tons a month ago, the ANRPC said.
However, with increasing preference toward the use of nitrile rubber gloves in dealing with COVID, Malaysia has scaled down its demand outlook to 522,000 tons from 603,000 tons reported last month.
As a result of the revisions, ANRPC's outlook for 2020 demand is marginally up at 12.8 million tons from 12.7 million tons anticipated a month ago. The revised outlook represents a 7.3% decrease from the previous year.
During the first six months of the year, NR demand fell 15% to 5.91 million tons, according to ANRPC data.
The outlook for NR production remained unchanged at the end of July, with full year output estimated to decline 4.5% to 13.2 million tons in 2020.
In the first six months of the year, the global production of NR fell 6.8% to 5.67 million tons, and the ANRPC expects a further 2.4% decline in production during the four months to end of October.