Rubber price to remain strong: DBS Vickers

Natural rubber prices are expected to remain strong with the Technically Specified Rubber 20 (TSR20) grade being maintained at an average of US$4,251 per tonne next year and US$4,157 per tonne in 2013.

The rubber grade currently fetches US$4,200 per tonne.

DBS Vickers Research (Singapore) Pte Ltd, in its regional rubber research note today said, the strong price is due to growing automotive demand from emerging countries and tight supply.

"Some moderation is expected from 2013 onwards as new supply from trees planted during 2005-2008 becomes available in the market," it said.

The global rubber planted areas are also expected to increase to an estimated 14.9 million hectares by 2020 from the 11.3 million hectares, currently.

"Based on our projections, a majority of natural rubber supply over the next ten years should come from outside the traditional top three producers, Thailand, Indonesia and Malaysia," DBS Vickers said.

Of the about 5.3 million metric tonnes increase in supply between 2010 and
2020, the research note stated, 3.1 million metric tonnes would come from
emerging natural rubber producers such as Myanmar and Vietnam.
Relative to total output however, Thailand should remain the largest
contributor to supply with 25.1 per cent.
"We are also anticipating the global demand for natural rubber to increase
by 3.7 per cent annually in the next 10 years, with volume reaching 15.4
million metric tonnes by 2020 from 10.7 million metric tonnes, currently.
"This, is on the back of increased demand from emerging markets, namely
China and India," the research house said -- BERNAMA