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SR production should pass 12 mmt this year.

The International Rubber Study Group has revised upward its forecast for synthetic rubber production, saying the market will increase 5.1% this year and 4.4% in 2005 when production is expected to reach almost 12.6 million metric tons globally. Production is expected to reach just over 12 million metric tons this year.

The IRSG adjusted after official revisions to statistics increased the output forecasts for North America. The region's production in 2003 was 2.34 mmt with the forecast for 2004 pegged at 2.41 mmt, a 3.2% increase. Production for 2005 is expected to increase another 2.4% to 2.47 mmt.

Exports will lead the highest regional growth rate in the "Other Europe" category to increases of 7.6% this year and 8% next. Synthetic rubber production in the Europena Union is forecast to grow 4.6% in 2004 to 2.72 mmt and 3.2% next year to 2.83 mmt.

The largest producing area, Asia/Pacific is expected to grow 6% this year to 4.87 mmt and another 5% in 2005 to 4.9 mmt.

The IRSG says that prices for synthetic rubber are spiking higher due to the continued strength of raw material costs, tight supplies and problems of a logistical nature related to railroad haulage. The contract price of butadiene rose by 2 cents/lb, to reach a 13month high of 32 cents/lb, in June. It represents the second successive price rise following 10 months of price rigidity.
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Title Annotation:Market Focus
Publication:Rubber World
Date:Jul 1, 2004
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