OUTLOOK FOR THE RUBBER ECONOMY IN THE FACE OF COVID -19


OUTLOOK FOR THE RUBBER ECONOMY IN THE FACE OF COVID -19

 Dr Hidde Smit, Consultant, Analysis and Forecasts for the Rubber Economy published in his blog with the International Rubber Study Group posted an outlook for the rubber economy in the face of COVID-19. Dr Hidde Smit has vast international exposure and over 40 years of experience in modeling and forecasting commodity markets, especially the market for rubber. During 2005-2009, he was Secretary-General of the International Rubber Study Group. He is now an independent consultant on analyzing and forecasting the rubber economy. His clientele includes various stakeholders in the rubber sector ranging from tire manufacturers to producers and traders of natural and synthetic rubber. Companies involved in investment-banking and asset-management also seek his advice. He prepares annual and quarterly reports on the outlook for the rubber market. This Blog aims at analyzing developments and presenting forecasts for the rubber market as a result of the COVID-19 crisis. Forecasts are presented for 2020Q2 and beyond. All data up to 2020Q1 is taken from IRSG publications. Forecasts are taken from the 2020Q2 quarterly bulletin prepared by the author. For further details see www.rubberforecasts.com. It is interesting to first briefly summarise what happened during the previous major crisis, the financial crisis of 2008-2009. The financial crisis 2008-2009 and the consumer side of the rubber market. The main reason for the negative growth rates of total rubber consumption (-15.8% and -12.2% for the two-quarters 2008Q4 and 2009Q1 respectively) was financial uncertainty, leading to the postponement of buying vehicles and tires and reducing inventories to a minimum. This decline was compensated in 2009Q2 and 2009Q3 (an increase of 20% and 12.4% respectively). In 2010Q1 the consumption reached the levels of early 2008 again. Figures for NR consumption are quite similar: -8.5% and -17.6% for 2008Q4 and 2009Q1 and 10.0% and 10.3% in 2009Q2 and 2009Q3. A broadly similar development as during the financial crisis is expected during the COVID-19 crisis. The difference is that most likely all special developments will happen in 2020; a decline of 11.9% in 2020Q1 and, on top of that, an estimated decline of 13.6% in 2020Q2. This represents a decline in consumption from 7.1 million tonnes in 2019Q4 to 5.4 million tonnes in 2020Q2. Moving back, consumption in 2020Q3 is projected to reach 6.8 million tonnes, an increase of 25.4%. This results for 2020 in a decline in total rubber consumption of 11.2% and in NR consumption of 10.6%. After each crisis the trends are changing, in most cases just shifting to a lower level. The shift in NR consumption after 2020 is relatively big. The crisis has led to a dramatic fall in NR prices, resulting in a decline in production intensity (PI). PI is defined as the ratio of actual production and normal production. Normal production is the level of production that would be reached if traditional tapping frequencies would be applied. PI will in general move in tandem with prices.

Comments

Post a Comment

Popular posts from this blog

ReTyre: Tyres Can Now Be Simply Zipped On. டயர்கள் இப்போது வெறுமனே ஜிப் செய்யப்படலாம

Image
ReTyre: Tyres Can Now Be Simply Zipped On ReTyre claims that they have created the world's first modular tyre system. It is quite easy to change the suspension setting, tyre pressure considering the different riding conditions and even the riding kit but changing the tyre tread has not been an easy task like the rest. Basically, there is a base tyre, ReTyre and a slick road tyre that can be used on tarmac surfaces but it also has zips on the the sidewall, above the rim. The manufacturer claims that additional skins with different tread pattern covers the Retyre with the help of the zip on the sidewall. There are 4 different skins for different terrains such as the Winter Traveller, Trail Rider, Gravel Chaser, Ice Rider. The best part is that the skins can be fitted without removing the wheel and can be easily stored too. The question which comes into everybody's mind is whether the zippers can withstand the torture from riding on different terrains, and the answer to it is ...
Read more

J J Murphy: Kerala’s Rubber Man

Image
J J Murphy: Kerala’s Rubber Man “On a rainy day in Ooty, South India’s famous hill station, some nuns were walking along a road in the cold. Suddenly, a car stopped by and the gentleman driving it offered them a lift. He asked why they were not using a vehicle in such inclement weather. The nuns replied that their convent did not have one. The next day, a local dealer delivered a brand new Dodge car to the convent. The astonished nuns thanked the donor. They also told him they could not keep the vehicle because there was no money to engage a driver or to buy petrol. The gentleman assigned a driver on his payroll to the convent. He also instructed a petrol bunk to forward the convent’s bills to his office.” This is an anecdote about a man you’ve probably never heard of – an Irishman named John Joseph Murphy (1872 – 1957). But in the rubber plantations of Kerala, Murphy is a legend. A planter who arrived in India at a very young age, it was Murphy who set up India’s first commercially su...
Read more

FILL FACTOR

In the rubber mixing process, especially for internal mixers like a 110-liter volume mixer, the recommended fill ratio typically falls within the range of: Fill Ratio: 65% to 85%The fill factor or fill ratio is typically calculated as: Fill Ratio (%) = (Batch Weight / Mixer Chamber Volume) × (Specific Gravity of Compound) × 100 Example: Mixer Volume = 110 liters Target Fill Ratio = 75% Specific Gravity of Rubber Compound = ~1.2 So: Batch Weight = (110 × 0.75) / 1.2 ≈ 68.75 kg This means around 68–72 kg would be an optimal batch weight for a typical compound with SG ~1.2 in a 110 L mixer.
Read more