2019 Thailand's Rubber Industry Overview
Thailand's rubber industry is still sluggish. In the first half of 2019, exports fell 6.0% year-on-year to 1.7 million metric tons. Exports to mainland China fell by 14.3% year-on-year, as mainland China continued to use its huge rubber stocks while increasing imports from new sources of supply, especially in countries such as CLMV (ie Cambodia, Laos, Myanmar, and Vietnam). Rubber export prices rebounded in the second quarter of 2019, due to: (i) the decline in global production following the outbreak of leaf fall disease in Indonesia; (ii) the three major rubber exporting countries such as Indonesia, Malaysia and Thailand agreed to a joint reduction Export amount. However, short-term price increases are not sufficient to compensate for the sharp decline in exports. As a result, the value of exports in the first half of 2019 decreased by 10.4% year-on-year to US$2.2 billion. To this end, all industrial rubber production has declined, such as rubber sheets (a year-on-year decrease of 30.2%), technically specified rubber (-10.0%) and concentrated latex (-12.0%).
Due to the continued slack global demand, increased competition from CLMV suppliers, and the slowdown in demand for the automotive component industry, Thailand's rubber exports continued to slump in the second half of 2019, and exports fell by 11.4% year-on-year; due to excess supply, rubber prices fell by 4% the above. Also, lower crude oil prices inhibit the price of synthetic rubber, which is a cheap alternative to natural rubber. As a result, the value of exports in the second half of 2019 decreased by 2.3% year-on-year to US$2.1 billion, resulting in a 6-7% decrease in exports for the entire year of 2019. This factor decreased (-8 to 9%) and prices fell (-1 to 2) %). On the supply side, domestic industrial rubber production will be reduced in 2019: rubber sheets (-33%), raw rubber (-17%), and concentrated latex (-10%).
2020-2022 Thailand's Rubber Industry outlook
The rubber industry will continue to weaken in the next three years because:
Important factors affecting the industry include the direction of government support (for example the use of rubber by public sector organizations), Thailand’s loan support for the sustainable rubber industry, and the decision of overseas investors to relocate production bases, especially the mainland China tire industry Investors.
Ribbed smoked sheet (RSS) and raw rubber: These product markets will be under pressure from reduced orders from mainland China, competition with Indonesia, Malaysia and Vietnam, and increased competition from new entrants such as Cambodia, Laos, and Myanmar. Therefore, the export volume of tobacco sheet rubber is expected to decline by 3-5%, while raw rubber with better quality after processing will grow by 0-2%.
Concentrated latex: driven by increased demand for latex gloves and medical supplies manufacturers, exports are expected to increase by 1-3%, especially in Malaysia, as the country is Thailand’s largest export market and the world’s largest rubber import country.