Little growth in rubber consumption.

World elastomer (natural and synthetic) consumption increased by only 0.4% from 16.47 million metric tons in 1998 to 16.54 mmt in 1999, less than expected despite the improvement in the world economy, according to the International Rubber Study Group. A marginal increase in 1999 and a decline of 0.2% in 1998 mean that world consumption has been stagnant at around the current level for the past three years.

The IRSG says marginal changes in world rubber consumption during the past two years are due to desynchronization in regional growth rates. In 1998, when the Asian financial and economic crisis dug deep, rubber consumption in Asia declined sharply. The crisis also spread to eastern European and Latin American countries, resulting in declines in rubber consumption in these two regions as well. The continued strong growth in Noah America and Western Europe balanced out the declines, leading to only a marginal fall in the world total in 1998. In 1999, the opposite was the case: The Asian economies and their rubber consumption have recovered, but weaknesses have developed in North American and Western European countries.

The relative share of synthetic rubber in global rubber consumption remained around 60-61% for the seventh consecutive year, as world SR and NR consumption increased at roughly the same rates, by 0.5% and 0.3%, respectively.

Output

For the first time since 1980, NR output in the top producing country Thailand, decreased. This coupled with the lower production in the third largest producing country, Malaysia, have resulted in world output showing a marginal decline from 6.71 million mt to 6.64 mmt. All other Asian producing countries, including Indonesia, are estimated to have increased output. The world's fastest growth in NR output last year was in the African producing countries. The only other country to show a fall in NR output was Nigeria. The steady rise of output in the Latin American producing countries continued. Global stocks have continued to rise since the second half of 1998, but the rate of increase slowed in the second half of 1999.

After a marginal decline in 1998, world SR output is estimated to have increased by 2% last year from 9.99 mmt to 10.19 mmt. Global SR stocks have increased steadily since 1995 to another record high in 1999. There were increases in SR output for all the Asian producing countries, particularly Indonesia, Thailand and China. There was an increase in Brazil's output despite a possible decline in domestic consumption as exports, helped by the currency depreciation, rose sharply. SR output in Argentina and Mexico is also believed to have fallen.

In western Europe, a sharp rise in Germany was also influenced by strong exports. SR output also increased in UK, Sweden, Spain and Finland, but declined in France and Italy, and was unchanged for Austria, Belgium and the Netherlands. There were declines in the output in Yugoslavia, Bulgaria, Poland and Romania, which balanced out quite a sharp rise in Russian Federation. SR output is estimated to have declined in South Africa and was unchanged in Australia.

Prices

The daily market price for NR increased by 12% in 1999. Much of the increase occurred from August to October, when it jumped by more than 50%. Far East rubber prices increased less than in western markets, and prices of SMRs increased, but those of RSS and latex declined.

As a result of an unexpected rise in oil prices, all major SR feedstock prices increased in the U.S., Europe and Asia. SR prices in western Europe fell earlier in the year because of the continued influx of cheap SBR imports, but the increasing cost of feedstocks pushed prices up in the fourth quarter. As in the past, NR prices fluctuated more than

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