Covid-19: Rubber demand to decline 8% in April, says ANRPC

KOCHI: The global demand for natural rubber (NR) is anticipated to be down 8.2% during April 2020 compared with the same month a year ago, warns Kuala Lumpur-headquartered the Association of Natural Rubber Producing Countries (ANRPC).
According to the inter-governmental agency, the rubber goods manufacturing industry of China, especially the auto-tyre manufacturing sector, may take longer time to run on normal capacity, which might result in a negative bearing on the demand for NR from China during April.
Natural rubber prices, which were staying low for several years, had already tumbled during March 2020, ANRPC noted in its report ‘Natural Rubber Trends and Statistics-March 2020’. The FOB price of SMR20 at Kuala Lumpur market fell by 18.5% during the period from 21 February through 24 March 2020 (From US$ 138/100 kg to US$ 112/100 kg).
“The period since the beginning of March has seen almost the whole world coming to a standstill as the COVID-19 virus assumed a global pandemic with no certain end in sight. While the epidemic started receding in China by mid-March, it spread to several other countries, including major natural rubber consuming countries and regions. The second half of March has seen several countries declaring an emergency and enforcing movement control and total closed-down in the efforts to reduce the epidemic spread. The situation has led to the closure of manufacturing plants by auto-tyre companies across countries and regions,” said R. B. Premadasa, Secretary-General, ANRPC in the report.
Commenting on the ANRPC report, Akshay Agarwal, managing director, Acumen Capital, said, “Technically, we see Natural Rubber prices dip to Rs 10000 and possibly lower in the short term before prices find a potential bottom whereas, on the upside, a strong sustained activity over key resistance at Rs.12500.0 could trigger a reversal in prices”.
At the same time, Kunal Shah, head of commodities research, Nirmal Bang, said: "We expect another 5% decline in rubber futures on ICEX if crude oil prices start falling as predicted”.