In the second week of January 2020 the price of rubber continued to move up due to the increase in crude oil prices due to the Middle East conflict and the approach to the signing of a trade agreement between China and the US.
On Monday, January 13th, the TOCOM Exchange was closed, Japan was off, so the price movements in Asia took place in the Southeast Asian and Chinese exchanges.
Rubber prices on TOCOM on Friday rose 0.4 yen (0.2%) to 201.4 yen per kilogram.
Rubber prices on Shanghai Futures at the close of Monday RU2005 fell 45 yuan to 13,325 yuan per kg. The price of rubber in Malaysia is 615 ringgit.
The Rubber Market in the last week of January 6th – 10th was greatly supported by 2 big news:
Other news that influenced the increase in rubber prices last week were:
A. The latest data from the International Rubber Research Organization (IRSG) announces an estimate of rubber demand to increase 2.6% in 2020 while in 2019 it is expected to fall 1.5% from 2018. According to data from IRSG global rubber demand will rise again in 2020.
B. The driving factor for rubber demand is from the tire industry, which grew by 4.3% in 2019. Demand from the tire industry increased by 1.5% in 2020.
According to the IRSG, demand will drop by 28.7 million tons in 2019 but is expected to increase by 29.5 million tons in 2020 and an increase of 30.3 million tons in 2021.
The report also states that global rubber demand in 2019 is expected to decrease by 0.1% or 13.8 million tons, compared to 2018. And in 2020 it will rise again by 1.9%. Global synthetic rubber demand in 2019 is expected to decrease 2.8% from 2018 or 15 million tons, and will rebound 3.4% in 2020.
The International Tripartite Rubber Council, which consists of Thailand, Indonesia and Malaysia estimates that rubber output fell by 800,000 tons due to a mushroom outbreak. Mushroom outbreaks attack the countries of Indonesia, Malaysia and Thailand. Indonesia is affected by a mushroom outbreak of 382,000 ha in Sumatra and Kalimantan plantations. Indonesia’s production fell 15% from 2018 to 3.76 million tons. In Thailand, the producer is 40% of the world’s rubber, the area affected by mushrooms is 330,000 rai and the production decrease is 50%.
Improvements in economic and industrial growth have increased demand for motorized vehicles and transport vehicles, so that demand for tires has increased and rubber demand will increase. Rubber prices will still increase in 2020. The movement of crude oil prices at the beginning of the year which also increased also affects the movement of rubber prices.
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