Turnaround in rubber consumption? (Market Focus).

The International Rubber Study Group said that for the first time in 16 months global rubber consumption increased on a month-to-month basis in April. The IRSG said the recovery was a result of increased consumption in North America, even though most other areas were still posting declines. The IRSG economists expect the other regions of the world will soon reverse the decline in consumption. World total natural and synthetic rubber is estimated to have increased marginally to the moving annual total of 17.7 million metric tons. The increase reduced the year-on-year rate of deficit to -4.2% for the month.

Despite the month-to-month increase in North America, the region still shows a year-on-year decline of around 8%, far higher than in the other major consuming regions.

The IRSG now estimates that worldwide rubber consumption for this year will be 17.2 million metric tons, almost 180,000 mt short of the total in 2001. Consumption in North America is expected to increase slightly to 3.26 mint in 2002 compared to the 3.23 mmt last year.

Rubber consumption in China is expected to surpass 2.8 mmt this year as that country continues to post increases. Consumption in 2001 totalled 2.79 mint.

In Europe, declines in France and Germany were more pronounced because of the size of the markets.

The IRSG said that the only factor that may threaten the promising outlook for rubber consumption is the movement in oil prices. Since reaching a low of $17 per barrel in November, 2001, prices have risen steadily to $28 per barrel in April. The IRSG sees this as leading to inflation and reduced consumer spending.

Rubber consumption

2002 figures are moving annual totals to April 2002 tons)

                      2001     2001     2001    2002     2002     2002
                        NR       SR    Total      NR       SR    Total

Canada                 132      228      360     135      227      362
U.S.A.                 972    1,900    2,872     985    1,920    2,905
Brazil                 198      304      502     198      304      502
Mexico                  75      142      217      70      133      203
Other L. America       122      199      321     112      193      305
Belgium/Luxem.          42      119      161      41      121      162
France                 251      477      728     238      476      714
Germany                244      630      874     246      609      855
Italy                  138      276      414     138      271      409
Spain                  183      265      448     173      250      423
U.K.                   114      167      281     116      163      279
Other E.U.             118      347      465     118      346      464
Belarus                 10       35       45      11       34       45
Czech Rep.              47       96      143      45       94      138
Poland                  48      109      157      47      108      155
Romania                 16       30       46      15       30       45
Russian Federation      33      620      653      33      602      635
Turkey                  82       89      171      79       88      167
Ukraine                 10       58       68       9       58       67
Other Europe            64      152      216      67      147      214
South Africa            51       50      101      50       46       96
Other Africa            72       56      128      72       55      127
Australia               29       44       73      27       45       72
China                1,215    1,575    2,790   1,235    1,584    2,819
India                  631      171      803     626      170      796
Indonesia              136      119      255     135      115      250
Japan                  724    1,107    1,832     706    1,077    1,783
Rep. of Korea          330      364      694     328      366      694
Malaysia               330       96      426     328       97      425
Taiwan                  94      227      321     100      229      329
Thailand               211      140      351     209      141      350
Other Asia             232      192      424     233      196      429
Total world          7,000   10,460   17,460   6,946   10,332   17,278