Impact of crude oil price movements on NR prices and...
Transcript of Impact of crude oil price movements on NR prices and...
Impact of crude oil price movements on NR prices and forecasts for
2013 and beyond
Global Rubber Conference 2013 Palembang, Indonesia
1-3 October 2013
Dr. Hidde Smit
This presentation
Six parts:
• Oil prices and rubber prices
• Analysis and perspectives for NR production potential
• Aggregate rubber consumption
• Natural and synthetic rubber consumption, production and price forecasts
• Assessment of earlier forecasts: May 2010 (Malaysia) and GRC-2012
• Alternative scenarios
Part 1.
Oil prices and rubber prices
Oil and natural rubber prices
0
100
200
300
400
500
600
700
1990 1995 2000 2005 2010
Ind
ice
s, b
ase
ye
ar 2
000
Oil Natural rubber
Oil and Butadiene prices
0
1
2
3
4
5
6
1990 1995 2000 2005 2010
Ind
ice
s, b
ase
ye
ar 2
00
0
Oil Butadiene
Butadiene and Styrene-Butadiene Rubber (SBR) prices
0
1
2
3
4
5
6
1990 1995 2000 2005 2010
Ind
ice
s, b
ase
ye
ar 2
00
0
Butadiene SBR
Modelling prices of SBR using prices of
butadiene and NR (model estimation
sample 1996-2010)
1.00
1.50
2.00
2.50
3.00
3.50
1996 1998 2000 2002 2004 2006 2008 2010 2012
US$
/kg
data model forecast
Part 2. Analysis and perspectives for NR production potential
• A general framework for natural rubber supply analysis is presented
• The trend in production will be called normal production
• Production exceeds normal production at high prices
• And vice versa
Normal production levels are analysed using the vintage approach
The vintage approach derives and includes per country
• 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
New planting, data/(re-)estimates (‘000 ha)
2000 2005 2006 2007 2008 2009 2010 2011 2012
Thailand 19 123 110 161 221 90 100 79 50
Indonesia 5 47 97 98 42 31 53 47 56
Malaysia 0 0 0 0 6 0 3 8 17
India 7 17 22 23 30 26 26 24 25
Vietnam 18 30 41 35 77 55 75 88 79
China 1 38 28 107 66 48 59 60 51
Sri Lanka 0 1 2 2 3 3 1 3 3
Cambodia 4 6 10 13 27 31 27 32 38
Philippines 3 2 16 22 16 8 13 26 20
Myanmar 18 25 71 86 52 37 43 37 32
Laos 1 4 6 11 25 25 25 25 25
Source: Association of Natural Rubber Producing Countries, slightly adjusted, or estimated
Natural rubber planting, Thailand source data: country statistics, Association of Natural Rubber
Producing Countries, with adjustments and own estimates
0
50
100
150
200
250
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
'00
0 h
a
new planting replanting
Natural rubber area (‘000 ha) and production (‘000 tonnes), Thailand
0
1000
2000
3000
4000
5000
6000
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
total area mature area normal production production
Natural rubber planting, 11 Asian countries source data: country statistics, Association of Natural Rubber
Producing Countries, with adjustments and own estimates
0
100
200
300
400
500
600
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
'00
0 h
a
new planting replanting
Natural rubber area (‘000 ha) and production (‘000 tonnes), 11 Asian countries
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
total area mature area normal production production
Global NR normal production to reach 18.4 million t. by 2025; actual production may be higher or lower depending on prices
0
2
4
6
8
10
12
14
16
18
20
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
ne
s
data (IRSG) normal production
Growth in normal production of NR
0
1
2
3
4
5
6
7
8
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
%
Part 3. Aggregate rubber consumption
Rubber consumption 2022 tyres 23.2, GRG 15.2, total 38.3, IRSG: World Rubber Industry Outlook Jun/2013
0
5
10
15
20
25
30
35
40
45
1995 2000 2005 2010 2015 2020
mill
ion
ton
nes
Tyres, data forecastsGRG, data forecastsTotal, data forecasts
Growth of total rubber usage
IRSG: World Rubber Industry Outlook Jun/2013
-8-6-4-202468
1012141618
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
%
Part 4.
Natural and synthetic rubber consumption, production and price
forecasts
Future growth in total rubber consumption (IRSG) and normal production of NR
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1012141618
1995 2000 2005 2010 2015 2020 2025
%
NR normal production growth Total rubber consumption growth
Determining factors driving the share of NR
In broad terms:
Technology • Broad groups of the end-uses: PC, LCV, M/H CV tyres
• The type of tyre within the broad group
• The manufacturer and the location of the factory
Price ratio of NR over SR
Developments in NR and SR prices
NR prices: market equilibrium between supply and demand
SR prices: based on cost developments with
a little influence of the market
The price of oil, forecasts based on US-EIA
0
20
40
60
80
100
120
140
1995 2000 2005 2010 2015 2020 2025
US$
/bar
rel
data forecasts
The price of Butadiene; supply constraints may push the price higher
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1995 2000 2005 2010 2015 2020
US$
/kg
data forecasts
SBR prices, increasing to $3.50 in 2025; NR prices declining to $1.95 and recovering to $3.55
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1995 2000 2005 2010 2015 2020 2025
US$
/kg
SBR data SBR forecasts NR data NR forecasts
NR share in consumption, increasing to maximum 45%
36
37
38
39
40
41
42
43
44
45
46
1995 2000 2005 2010 2015 2020 2025
%
data 43.5 forecast
Natural rubber consumption
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
N. America Europe Japan China
India Other Asia R.O W.
Natural rubber consumption
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
Korea Indonesia Malaysia Thailand
Natural rubber consumption
0.00
0.10
0.20
0.30
0.40
0.50
0.60
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
Taiwan, China Philippines Vietnam Other Asia
World rubber consumption 2025: NR 19.1, SR 23.4, total 42.5
0
5
10
15
20
25
30
35
40
45
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
NR forecasts SR forecasts total forecasts
Natural rubber production
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
Thailand Indonesia
Natural rubber production
0.0
0.5
1.0
1.5
2.0
2.5
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
Malaysia India Vietnam China Other Asia
Estimated tapping intensity (production / normal production)
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Part 5.
Assessment of earlier forecasts: May 2010 (Vintage model training workshop Malaysia) and GRC-2012
Growth in normal production of NR
0
2
4
6
8
2000 2005 2010 2015 2020 2025
%
May-10 GRC 2012 GRC 2013
Growth in total rubber consumption
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2000 2005 2010 2015 2020
%
IRSG Dec-2009 GRC 2012 (IRSG June 2012) IRSG Jun-2013
Natural rubber prices
0
1
2
3
4
5
2000 2005 2010 2015 2020 2025
US$
/kg
May-10 GRC 2012 GRC 2013
Part 6: Alternative scenarios
Oil prices • The effects of two alternative scenarios are presented
Consumption • The current set of consumption forecasts may be on the high
side for 2014-2016; an alternative scenario is presented
Lower and higher scenarios for oil prices
The price of oil, forecasts based on US-EIA
0
20
40
60
80
100
120
140
160
180
1995 2000 2005 2010 2015 2020 2025
US$
/ba
rre
l
oil price base low price scenario high price scenario
SBR prices
0
1
1
2
2
3
3
4
4
5
2000 2005 2010 2015 2020 2025
US$
/kg
SBR price baselow oil price scenario high oil price scenario
NR prices
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2000 2005 2010 2015 2020 2025
US$
/kg
NR price base
low oil price scenario high oil price scenario
Lower scenario for growth in total rubber consumption
Slightly lower growth in total rubber consumption during 2014-2016
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2000 2005 2010 2015 2020
%
base scenario lower scenario
World rubber consumption
0
5
10
15
20
25
30
35
40
45
1995 2000 2005 2010 2015 2020 2025
mill
ion
ton
nes
base scenario lower scenario
NR prices
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2000 2005 2010 2015 2020 2025
US$
/kg
base scenario lower scenario
Thank you!