Transcript The future for natural rubber in the world rubber industry

Outlook for the rubber industry
International Smallholder Rubber
Conference
Phnom Penh, Cambodia
24 June 2009
Panel 4 : Prospects
Prepared by the Secretariat of the
International Rubber Study Group
Presentation content
The
world economy, the IMF scenario
The
vehicle sector
The
tyre sector
Long-term
aggregate rubber demand forecasts
Natural
rubber supply potential
Natural
and synthetic rubber demand
The
effect of alternative economic growth scenarios
Economic developments
Economic
activity is represented by Gross Domestic
Product (GDP)
IRSG
uses data from IMF
IRSG
forecasts for 2009 to 2014 are taken from the IMF
IMF
published data/forecasts in April 2009
Forecasts
for later years are based on IRSG model
World GDP growth, July 2008 and April
2009: recession hits earlier
8
7
6
5
4
% 3
2
1
0
-1
-2
1970
1975
data
1980
1985
1990
1995
forecasts July 2008
2000
2005
2010
2015
forecasts April 2009
The vehicle sector
Passenger car production
90
80
70
millions
60
50
40
30
20
10
0
1975
1980
1985
1990
1995
production
2000
Jul-08
2005
Apr-09
2010
2015
Commercial vehicle production
30
25
millions
20
15
10
5
0
1975
1980
1985
1990
1995
production
2000
Jul-08
2005
Apr-09
2010
2015
Growth in vehicle production
% growth
Passenger
cars
Commercial
vehicles
2006
6.3
0.4
2007
5.8
4.5
2008
-1.3
-6.6
2009
-22.4
-20.1
2010
3.6
7.6
2011
22.3
12.8
2015
14.3
10.7
2018
-3.4
-5.8
The tyre sector
Tyre sector
Tyre sales is the sum of

original equipment (OE) tyre sales, determined
by the number of vehicles produced

replacement (RP) tyre sales, determined by
the number of vehicles on the road
Passenger car tyre sales,
original equipment
450
400
350
millions
300
250
200
150
100
50
0
1975
1980
1985
1990
sales
1995
2000
Jul-08
2005
Apr-09
2010
2015
Passenger car tyre sales,
replacement
1200
1000
millions
800
600
400
200
0
1975
1980
1985
1990
sales
1995
2000
Jul-08
2005
Apr-09
2010
2015
Passenger car tyre sales,
total
1600
1400
millions
1200
1000
800
600
400
200
0
1975
1980
1985
1990
sales
1995
2000
Jul-08
2005
Apr-09
2010
2015
Commercial vehicle tyre sales,
original equipment
140
120
millions
100
80
60
40
20
0
1975
1980
1985
1990
sales
1995
2000
Jul-08
2005
Apr-09
2010
2015
Commercial vehicle tyre sales,
replacement
600
500
millions
400
300
200
100
0
1975
1980
1985
1990
sales
1995
2000
Jul-08
2005
Apr-09
2010
2015
Commercial vehicle tyre sales,
total
700
600
millions
500
400
300
200
100
0
1975
1980
1985
1990
sales
1995
2000
Jul-08
2005
Apr-09
2010
2015
Growth in tyre production
% growth
Passenger car
tyres
Commercial
vehicle tyres
2006
0.8
3.7
2007
5.9
5.6
2008
-0.4
0.2
2009
-6.4
-3.8
2010
-3.4
4.5
2011
4.5
5.4
2015
8.7
7.6
2018
0.4
0.8
Long-term aggregate rubber
demand forecasts
Aggregate rubber demand
 Aggregate
rubber demand in the tyre
sector; influencing factors are tyre
production and rubber weight per tyre

Aggregate rubber demand in the general
rubber goods sector; influencing
factor is economic development
Rubber consumption 2018:
tyres 16.5, GRG 11.2, total 27.7
35
30
million tonnes
25
20
15
10
5
0
1975
1980
1985
tyres Jul-08
GRG May-09
1990
1995
2000
tyres May-09
total Jul-08
2005
2010
2015
GRG Jul-08
total May-09
World rubber consumption
(‘000 tonnes)
Total rubber
volume
% growth
2006
21,810
4.0
2007
23,045
5.7
2008
22,299
-3.2
2009
20,817
-6.6
2010
21,392
2.8
2011
22,502
5.2
2015
27,118
6.1
2018
27,669
0.7
Modelling natural rubber
supply potential
Natural rubber supply potential
 About
85% of natural rubber is
produced by smallholders
 Production capacity suitable concept
for synthetic rubber, but not for natural
rubber
A general framework for natural
rubber supply
 The
trend in production will be called
normal production
 Production
exceeds normal production
at high prices
 And
vice versa
The vintage approach derives and
includes
 The
composition of the total area for
natural rubber according to the year of
planting (the vintages)
 The average yield profile for a hectare
of rubber during its life
 Technical progress in quality of clones
affecting yield profiles of hectares
planted in various years
18 April 2009
Projections up to 2018 depend
on planting policies
Natural rubber production
Thailand
4000
3500
'000 tonnes
3000
2500
2000
1500
1000
500
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Natural rubber production
Indonesia
4000
3500
'000 tonnes
3000
2500
2000
1500
1000
500
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Natural rubber production
Malaysia
1800
1600
'000 tonnes
1400
1200
1000
800
600
400
200
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Natural rubber production
India
1200
'000 tonnes
1000
800
600
400
200
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Natural rubber production
Vietnam
'000 tonnes
1000
900
800
700
600
500
400
300
200
100
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Natural rubber production
China
800
700
600
'000 tonnes
500
400
300
200
100
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Natural rubber production
Sri Lanka
180
160
'000 tonnes
140
120
100
80
60
40
20
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
'000 tonnes
Natural rubber production
Cambodia
200
180
160
140
120
100
80
60
40
20
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Global NR normal production to reach
13.0 million t. by 2018; actual production
higher or lower depending on prices
14000
12000
'000 tonnes
10000
8000
6000
4000
2000
0
1975
1980
1985
data
1990
1995
2000
2005
2010
normal production
2015
Confronting supply potential and
demand at 2008 market shares
The market
 Forecasts
for consumption of rubber
(already presented)
 Production potential of natural rubber
(already presented)
 How do these compare?
What are the determining
factors driving the share of NR
in total rubber consumption
In broad terms:
• Technology: shares may depend on the
country or the factory
• Composition of the end-uses: cv tyres use
more NR than pc tyres
• Price ratio of NR over SR
Rubber prices and oil
Explaining developments in NR
prices
Analysis based on market
equilibrium:
supply and demand
Explaining developments in
SR prices
Modelling prices of SBR using prices of
styrene, butadiene and NR and GDP:
a good fit
2.50
2.30
2.10
US$/kg
1.90
1.70
1.50
1.30
1.10
0.90
1990
1992
1994
1996
1998
data
2000
model
2002
2004
2006
2008
Projections of prices of oil
are given below.
The price of oil to level off at around
US$80/barrel and then decline
140
120
US$/barrel
100
80
60
40
20
0
1990
1995
2000
data
2005
Jul-08
2010
Apr-09
2015
The IRSG makes and needs
price forecasts for NR and SR
in interaction with production
and consumption forecasts.
The IRSG is not allowed to
publish these forecasts.
NR share in consumption
48
47
%
46
45
44
43
42
41
40
39
38
1995
2000
share
2005
43%
2010
forecast
46%
2015
Rubber consumption 2018:
NR 12.8, SR 14.9, total 27.7
35
30
million tonnes
25
20
15
10
5
0
1975
1980
1985
NR Jul-08
SR May-09
1990
1995
2000
NR May-09
total Jul-08
2005
2010
2015
SR Jul-08
total May-09
World natural rubber consumption
(‘000 tonnes)
Consumption NR
volume
% growth
2006
9,243
1.8
2007
9,884
6.9
2008
9,726
-1.6
2009
9,232
-5.1
2010
9,703
5.1
2011
10,263
5.8
2015
12,313
6.1
2018
12,809
1.3
Consequences of
alternative GDP scenarios
Base:
GDP scenario as described above
Optimistic
scenario: higher growth than
in the base scenario
Pessimistic
scenario: lower growth than
in the base scenario
Growth in world GDP,
alternative scenarios
6
5
4
3
%
2
1
0
-1
-2
-3
2000
data
2002
2004
base
2006
2008
2010
optimistic scenario
2012
2014
2016
2018
pessimistic scenario
NR consumption 2018:
between 12.6 and 13.0 million tonnes
15
14
million tonnes
13
12
11
10
9
8
7
6
2000
data
2002
2004
base
2006
2008
2010
optimistic scenario
2012
2014
2016
pessimistic scenario
2018
The role of the IRSG
The
IRSG is the only public organisation providing
appropriate forecasts for the rubber industry.
This
is most important in the current uncertain
situation.
The
IRSG needs support and membership from all
governments and industries involved in rubber and
rubber products in order to be able to provide this
service for optimal public and private planning .
Thank you!