Sector Trends     17-Jun-24
Sector
Rubber: Price accelerates
The tyre-grade RSS-4 natural rubber (NR) price at Kottayam increased 0.4% to Rs 183.11 per kg in May 2024 over April 2024. The NR price shows an increase of 15.9% in May 2024 over May 2023. However, the NR price has further jumped 5.9% to Rs 193.83 per kg at Kottayam in early June 2024, while continuing sharp jump for sixth straight month.

RSS-4 (Bangkok) NR price, benchmark international price, declined 2.4% to US$ 2.32 per kg in May 2024 over April 2024. The international price of NR RSS-4 (Bangkok) shows an increase of 32.6% in May 2024 over May 2023. The NR price has further rose 6.3% in early June 2024 to US$ 2.47 per kg.

Rubber production, consumption, trade

India's total rubber production increased 3.6% to 152,460 tonnes in January 2024 over January 2023. The NR production galloped 4.0% to 105,000 tonnes, while the SR production jumped 2.9% to 47,460 tonnes in January 2024. India's total rubber consumption moved up 3.0% to 178,800 tonnes in January 2024.

The rubber production jumped 7.5% to 1,193,054 tonnes in April-January FY2024, against 4.7% growth in the same period last year, while the rubber consumption improved 4.1% to 1,826,565 tonnes compared with 8.1% rise in the corresponding period last year. The rubber imports increased 0.6% to 68,069 tonnes in January 2024 over a year ago, compared with 14.0% dip recorded in January 2023. NR imports dipped 1.7% to 41,355 tonnes, while the SR imports moved up 4.5% to 26,714 tonnes.

The consumption of rubber by auto tyre manufacturers, which accounted for 67.0% of total consumption, increased 0.5% to 119,738 tonnes in January 2024 over January 2023. The consumption of rubber by auto tyre manufacturers, accounting for 67.4% of the total consumption improved 0.6% to 1,231,257 tonnes in April-January FY2024 over April-January FY2023.

Natural Rubber

The output of NR increased 4.0% to 105,000 tonnes in January 2024 over a year ago. The production of NR preliminarily estimated for January 2024 is 71,000 tonne, up 6.0% from 67,000 tonne produced during the same month a year ago. The NR consumption moved up 1.8% to 114,000 tonnes in January 2024. Preliminary estimate suggests that the country consumed 117,000 tonne of NR during January 2024, up 5.4% over 111,000 tonne in January 2023. India's NR imports slipped 1.7% to 41,355 tonnes, while the NR export jumped 90.9% to 861 tonnes in January 2024.

The NR consumption improved 5.4% to 1,179,000 tonnes, while the NR production increased 1.9% to 739,000 tonnes in April-January FY2024 over a year ago. The NR imports eased 10.3% to 415,161 tonnes, while the NR exports increased 39.6% to 3,410 tonnes in April-January FY2024.

The NR stocks stood at 4.04 lakh tonnes in January 2024 compared with 3.73 lakh tonnes in the previous month. The NR stocks have declined from 4.77 lakh tonnes in January 2023.

Synthetic Rubber

India's SR production rose 2.9% to 47,460 tonnes in January 2024 over January 2023. The consumption of SR increased 5.2% to 64,800 tonnes, while the imports improved 4.5% to 26,714 tonnes in January 2024. The consumption of SR by auto tyre makers increased 6.2% to 44,108 tonnes in January 2024.

The SR stocks rose to 135,495 tonnes end January 2024 from 135,240 tonnes in the previous month. The SR stocks showed rise from 120,700 tonnes end January 2023.

The SR production moved up 18.1% to 454,054 tonnes, while consumption improved 1.9% to 647,565 tonnes in April-January FY2024 over a year ago. The imports of SR fell 0.2% to 291,744 tonnes. The consumption of SR by auto tyre makers rose 1.3% to 440,341 tonnes.

ANRPC NR Trends April 2024

In April, the average daily FOB prices across key markets showed a declining growth in red, except for RSS-4 in Kottayam. The monthly production saw a year-on-year improvement of 1.6% as seasonal leaf fall came to an end. Additionally, currency strength against the greenback during the same period is crucial to influencing price movements, besides on the market sentiments in rubber market. The Asian Development Bank's April outlook revealed that developing Asia's growth will remain resilient this year despite an uncertain external environment. The shift towards more dovish monetary policies in most economies, coupled with a recovery in export goods resulted in a positive regional outlook. However, policymakers must remain alert to several risks, including escalating conflicts and geopolitical tensions that could disrupt supply chains and increase commodity price volatility. Additionally, US monetary policy, market conditions in China’s property sector, and adverse climate effects pose further challenges. To enhance resilience, policymakers should prioritize strengthening trade, cross-border investment, and commodity supply networks.

Outlook

The domestic NR prices have jumped sharply in tandem with global prices on account of floods in major producing country. Prices will continue to track the performance of regional rubber futures markets, ringgit's strength against the US dollar, and benchmark crude oil prices amid prevailing concerns over tight raw material supply in major producing countries due to extreme weather conditions. Traders will await economic indicators from major economies and further cues on the outlook of US interest rates amid hopes for more Chinese stimulus measures. Market traders will be keeping a close watch on the ongoing geopolitical conflict in the Middle East and further developments surrounding the shipping industry.

The adverse weather conditions are anticipated to impact both tree productivity and disease susceptibility. The recent heatwave experienced across major natural rubber (NR) producing countries due to El Niño in April is expected to be followed by rain and the end of the El Niño phenomenon in late May. Additionally, heavy rainfall may impede harvesting activities, potentially resulting in reduced production, even after production resumes following seasonal leaf exfoliation.

Rubber Production, Consumption and Trade
January April-Jan % change
2024 2023 2023-24 2022-23 Jan-24 Apr-Jan FY24
Total NR & SR Production 152460 147140 1193054 1109447 3.6 7.5
Natural Rubber 105000 101000 739000 725000 4.0 1.9
Synthetic Rubber 47460 46140 454054 384447 2.9 18.1
Total NR & SR Consumption 178800 173610 1826565 1754540 3.0 4.1
Natural Rubber 114000 112000 1179000 1119000 1.8 5.4
Synthetic Rubber 64800 61610 647565 635540 5.2 1.9
NR & SR Consumption for Auto Tyre 119738 119150 1231257 1223408 0.5 0.6
Total NR & SR Imports 68069 67630 706905 755133 0.6 -6.4
Exports of Natural Rubber 861 451 3410 2442 90.9 39.6
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