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Back You are here: Home International Articles by Category Mining Three biggest rubber producers to withdraw exports and cut production to bolster prices

Three biggest rubber producers to withdraw exports and cut production to bolster prices

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Thailand, Indonesia and Malaysia — the world's three largest rubber producers put into effect a plan to bolster natural rubber prices by withholding exports and cutting production.

The plan also comprising International Tripartite Rubber Council (ITRC), calls for a 300,000 ton reduction in exports during 2012 and 2013 and a 150,000 ton production cut to be implemented by accelerating rubber tree replanting program. The three ITRC members make up about 70% of world natural rubber production.

According to a report by International Rubber Study Group, natural rubber production will reach 11.3 million tons in 2012, exceeding anticipated demand of 11.2 million tons. Production is expected to increase to 11.8 million tons in 2013 but this estimate does not include the production cuts that will be implemented starting at the end of the current harvest in February 2013.

Weaker exports due to slack demand in the U.S. and Europe have reduced demand for new trucks and truck tyres in China. Slower truck sales in the U.S. and Europe and sluggish investment in mining and construction equipment globally has also reduced the growth in demand for natural rubber used in tyres. An average medium to heavy-duty truck tyre will use up to 51 pounds of natural rubber whereas passenger car tyre will use about 3.5 pounds of natural rubber.

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