IRSG sees growth in rubber consumption, production.

The International Rubber Study Group concluded at the end of its 38th Assembly in Bali, Indonesia that despite the economic ills in Southeast Asia, rubber consumption and production will continue to grow in 1999.

The IRSG statistical committee forecast a growth of total elastomer demand in 1999 by 1.7% to 16.9 million metric tons. The demand for natural rubber will be 6.7 mmt, an increase of 2.1% over 1998, and 10.2 mmt of synthetic rubber, which would be an increase of 1.5%.

A slight decrease in synthetic rubber production will keep total elastomer production growth under 1% in 1999, the IRSG said. Natural rubber production is expected to increase by 1.5% to 6.8 mmt. Synthetic rubber production is predicted to decrease by 0.5% to 10.3 mmt.

Synthetic rubber production in Russia is predicted to drop 15% from 720,000 mt to 600,000 mt to account for the drop in SR worldwide figures. Slight decreases in production are expected in the U.S. (1%), Japan (3%), Republic of Korea (1%) and Taiwan (4%). The SR production in the U.S. is expected to be near 2.63 mmt in 1999, down from the 1998 estimate of 2.66 mmt. Synthetic rubber production in the U.S. was 2.58 mmt in 1997.

U.S. rubber consumption is expected to increase slightly next year to 3.43 mmt from the estimated 3.42 mmt this year: Consumption in 1997 was 3.35 mmt.

The impact of the economic problems in Asia and Russia are reflected in the committee's figures for rubber consumption. The Russian Federation is expected to consume 462,000 mt next year, which is almost 10% lower than this year's 512,000 mt. Rubber consumption was 534,000 mt in 1997.

Consumption in China is expected to increase about 2% to 1.99 mmt, while Japan's is expected to decline for the third straight year. The consumption of 1.8 mmt predicted for Japan is nearly 2% lower than this year's estimates. While consumption in Korea is expected to increase to 675,000 mt, it is still lower than the 708,000 mt consumed in 1997. Consumption in Indonesia is also expected to rebound slightly to 197,000 mt, which is 22% lower than the consumption in 1997 of 254,000 mt.

The IRSG had been concerned that a shortage of natural rubber would occur around the beginning of the next century. Now its chief economist, Prachaya Jumpasut, says that may be delayed until the end of the decade. The world's top two NR producers, Thailand and Indonesia, are both increasing output, while the third largest producer, Malaysia, will remain at 900,000 mt. Thailand's production is expected to reach almost 2.2 mmt in 1999, while Indonesia's production will be just over 1.6 mmt.

Natural rubber production

Estimates for 1998 and forecasts for 1999 (000 tons)

                       1997    1998    1999

Brazil                   58      60      62
Guatemala                35      36      38
Other Latin America      16      17      18

Cameroon                 59      61      63
Cote d'Ivoire           107     115     120
Gabon                    10      11      12
Ghana                    14      12      12
Liberia                  67      80      90
Nigeria                  90      88      87
D.R. of Congo            11      12      13
Other Africa              0       0       0

                       1997      1998      1999

Bangladesh                3         3         4
Cambodia                 40        35        35
China                   444       455       465
India                   580       609       639
Indonesia             1,505     1,576     1,614
Malaysia                971       900       900
Myanmar                  20        20        22
Papua New Guinea          8         8         9
Philippines              65        65        67
Sri Lanka               106       107       107
Thailand              2,031     2,123     2,186
Vietnam                 201       219       238

Total world (a) (rounded) 1997 - 6,420; 1998 - 6,610; 1999 - 6,800