What’s next for rubber – Bearish prices on supply glut or possible overconsumption
Following on from all the global economic turmoil seen in 2022, amid the recent surge in Covid-cases in China, 2023 is likely to present a fresh set of challenges for the rubber market. Amid the bearish demand cues amplified by the expectation of a slow tire market recovery, rubber prices will likely remain bearish in 2023. As a result, rubber production in some of the major producing countries like Indonesia may take a hit.
As of 2021, the cumulative surplus in rubber was estimated to be around 1.6 million tons, resulting in the market being oversupplied for most of 2022. According to the Association of Natural Rubber Producing Countries (ANRPC) data, in November 2022, global rubber production was at 1.426 million tons, while demand was at 1.301 million tons.
Such a trend was reflected in the market intelligence collected by Helixtap. Many market participants echoed the existence of a supply glut and price competition amongst rubber grades to maintain cash flows.