The Vietnam Rubber Association has recently held a workshop on “Global rubber supply-demand reality and prospect” in Ho Chi Minh City to help rubber companies grasp a wide view on supply and demand of rubber materials, generalise rubber price and production, and forecast the new trend of the global rubber industry amid economic recession and the shrinking auto industry .
The global financial crisis and economic recession hit many industries, especially the automobile industry. The downsize of the four-wheeler industry dented the demand for tires and other rubber products, sending down the prices of natural rubber sharply. According to the Vietnam Rubber Association, economic recession concerns drove down the demand for goods, especially cars. The demand from automakers in key markets like the United States, Japan and China is falling and will continue to drop in 2009. The change in the tire industry will have considerable consequences for the rubber industry.
Mr Hidde P. Smit, General Secretary of International Rubber Study Group (IRSG), said consumers will give up unessential commodities on concerns over economic recession. However, consumers still need to change vehicle tires and this will help this market segment recover sooner.
The International Monetary Fund (IMF) forecast that rubber growth is estimated at 0.5 per cent in 2009 and the industry will revive in 2010, with a growth of 3.5 per cent.
Also according to a recent report by International Rubber Study Group (IRSG), the global economic recession will drive down the demand for rubber in 2008 and 2009 by 2-3 per cent, but the recovery will begin after 2010 and thrive until 2018. Natural rubber will suffer less than synthetic rubber as the use of environment-friendly materials becomes more popular. According to the forecast, the consumption of rubber will amount to 28 million tonnes in 2018.
Over the past two months, the natural rubber market rebounded due to the higher price of crude oil and the decrease in supply. The price of rubber is estimated to rise in the next few weeks. This is a good prospect for the revival of the Vietnamese rubber industry. However, the Vietnam Rubber Association warned enterprises not to enforce measures that could disrupt the supply and demand of rubber products.
To prevent a devastating price fall, the Vietnam Rubber Association has agreed with regional rubber groups and associations to send warnings to their members to take joint actions this year. Accordingly, if the domestic price is above US$1,000 per tonne, production and process activities will be still normal but if it is below US$1,000, companies will stockpile from 100,000 tonnes to 200,000 tonnes, or 15-25 per cent of total output, and if the export price of spot contracts is below US$1,350 per tonne, Vietnam will cut export.
M.N
Vietnamese
