Display mode (Doesn't show in master page preview)

23 Jan 2012


Rubber Prices, 2012: To Rise But Lower than 2011 Average (Business Brief No. 3234)

Rubber prices in 2012 are expected to be volatile, influenced chiefly by global supply and demand. Close attention should be paid to the overriding concern of the Eurozone debt crisis and an apparent global economic slowdown that may dent growth in the automotive industry as well as rubber imports by China, which is currently the largest rubber consuming country. Other factors include fuel price movements, speculative trading by commodity funds in the futures market and the Thai government's intervention policies to shore up rubber prices. These factors will likely cause rubber trade to be volatile this year, in continuation from 2011, after a bullish run that begun in 2009.

KResearch forecasts that raw rubber sheet prices at the Hat Yai rubber market – currently at THB110.29/kg. (as of January 20, 2012) – may rise after the Chinese New Year amid depleting stocks in China, a resumption of Chinese rubber purchases and the Thai government's measures to assist rubber farmers. Should the Chinese economy remain resilient (after growing 8.9 percent in 4Q11), it may also give a boost to rubber trade. Nonetheless, the average price of raw rubber sheets is unlikely to touch the THB132.42/kg. level achieved in 2011, given the slowing global economy and rising output.