LONDON, England – According to the latest market analysis of the English Economist Intelligence Unit – EIU in short – the current record-breaking metal prices will fall about one quarter over the next years. Copper prices for example, will drop approximately 50 %. Even oil prices will decrease about ten%. On the other hand there will be a further increase of rubber raw prices.
Raw rubber prices started to go up about two years ago. Since than they have tripled. For 2006 the EIU forecasts an average price jump of 25 %.
At the present time a ton of rubber raw costs US$ 7,220. Last year’s production was 8.84 million tons: this year it’ll be around 9.16 million tons. Seven million tons alone come from Asia. And demand is rising much faster than production. Main reason is the rapidly growing demand from China. “The worldwide shortages will become more acute and last longer than expected,” says Kona Haque, the responsible person for this EIU survey. In 2007 the world’s rubber stockpile will last for about eight weeks only. 2004 it was enough for 14 weeks.
There is more behind the rapid rubber price increase than just Chinese demand. Due to weather conditions China lost about one sixth of its rubber production 2005. According to an article in German newspaper the “Sueddeutsche Zeitung” in other parts of Asia rubber production was first hit by too little rainfall and then too much rain in the autumn. And in Southern Thailand rebel attacks are harming the rubber harvest.
Thailand produces about 30 % of the world’s raw rubber, followed by Indonesia (20 %) and Malaysia (12 %).
The EIU says that international tire makers react very slowly on the rising natural and synthetic material prices. Synthetic rubber is mainly made out of an oil side product called butadiene and therefore dependent on raw oil prices. Synthetic rubber covers about 60 to 70 % of the world’s rubber demand. Today the price gap between synthetic and natural rubber isn’t as big as before. (JB)