According to news from Thailand on May 26th, Director of the Rubber Bureau of Thailand, Nagong, stated that rubber prices in the second quarter of 2023 are still fluctuating in a narrow range, but there is an upward trend due to the gradual recovery of the global economy, especially the increasing demand in the automotive industry, where rubber is the main raw material.

The global sales of light vehicles in March this year were 11.6% higher than last year, due to the relaxation of the production chain and China's acceleration of car purchases before the end of tax incentives. Meanwhile, in the past, the number of global car assemblies continued to grow by 7.1%, while India had the highest growth rate, reaching 23.1%; Germany grew by 10.8%; The US grew by 9.7%, which is a positive factor for tire prices.

Nagong pointed out that for the demand for natural rubber in 2023, the Natural Rubber Manufacturers Association (ANRPC) recently predicted a global demand of approximately 14.912 million tons of natural rubber. In addition, the Rubber Bulletin released by LMC in April this year stated that global demand for rubber is expected to gradually increase, but global production is expected to decrease. Meanwhile, the American Tire Manufacturers Association (USTMA) predicts that tire shipments in the United States will increase this year, all of which are favorable for future rubber prices.

Last year, the global rubber production was 14.53 million tons, while in the first quarter of this year, the global rubber production was 3.312 million tons. It is expected that the annual rubber production will be lower than last year. Due to the outbreak of rubber tree monsoon leaf disease, especially in Indonesia, over 2 million rubber plantations have been affected. Rubber plantations in Thailand and Malaysia are also affected by leaf disease, while rubber plantations in Yunnan Province, China are affected by powdery mildew. In addition, the possible occurrence of the 'El Ni ñ o phenomenon' this year will result in less rainfall than usual, and dry and hot weather will make it impossible for many areas to cut rubber, so production will definitely decrease.

If we consider the basic factors of the above support, starting from the middle of this year, the price of rubber should gradually increase. Currently, the price of rubber remains stable, and the price of tobacco adhesive is 50 baht per kilogram; The price of raw film is 48 baht per kilogram; Fresh latex costs 43 baht per kilogram.

Part of the reason is that the old rubber inventory in importing countries is no longer available, and the Thai baht exchange rate may strengthen. However, with the recovery of the automotive industry, growth in car sales and tire production, global demand for rubber is increasing. In the long run, this will have a positive impact on rubber and prices will definitely rise.

Ms. Atiwi, Director of Economic Affairs at the Thailand Rubber Bureau, said that based on the rubber situation in the first quarter of this year, the global rubber production was 3.312 million tons, which is lower than the global rubber demand of 3.73 million tons. Therefore, the global demand for rubber is still increasing.

In addition, due to increased investment in the foreign rubber industry, Thailand has become the country with the highest rubber usage rate, and exports are also expected to reach 4.275 million tons this year. The rubber export volume in January and February this year has increased compared to the same period last year. The largest rubber importing country in Thailand is still China, accounting for 55%, followed by Malaysia, accounting for 13%, and the United States, accounting for 4%.

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