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Rubber Journal Asia Synthetic Rubber

Synthetic rubber: down but not out rubber gloves that are made from various kinds of polymers and latex including nitrile rubber, vinyl and neoprene. With the current price dynamics of these rubber types, synthetic rubber (which is considered more stable in supply than natural rubber) suddenly becomes more expensive. Will this affect demand for synthetic rubber in gloves manufacturing? New York-headquartered Persistence Market Research (PMR) finds that high-grade nitrile (synthetic) rubber is even more increasingly replacing natural latex, in light of the increasing incidences of allergy with latex gloves use.

Mired by the current tight supply and high prices, brought on by an increase in oil prices, the synthetic rubber sector is facing challenging times; but it still has a lucrative future with companies shoring up capacities and tying up resources to build up the market further, according to Angelica Buan in this report.

High-grade nitrile rubber is found to be even more increasingly replacing natural latex, in light of the increasing incidences of allergy with latex gloves use

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he call from the Organisation of the Petroleum Exporting Countries (OPEC) to reduce oil output to 1.2 barrels per day (BPD) for six months starting January 2017 resulted in a rise in crude oil prices, according to the Association of Natural Rubber Producing Countries (ANRPC). The latter is an inter-governmental organisation comprising 11 members that together account for about 90% of global production of natural rubber: Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam. The move levered up the Brent crude oil by 20.5% or averaging at US$53/barrel this year, from the previous year’s US$44/barrel, citing the recent Short-Term Energy Outlook released by the US Energy Information Administration (EIA). With oil price revitalised, prices of feedstock, including that of synthetic rubbers, being petroleum-derived products, are set to go up. It is said that a mere percent change in oil rates translates into 0.6% shift in prices of synthetic rubbers. The scenario, on the other hand, offers demand opportunity for natural rubber amid tight supply that is further riled by the recent floods in Thailand, which accounts for 37% of global supply of natural rubber. According to ANRPC, the increase in oil price has kindled possibilities for natural rubber to be filling in demand for synthetic rubbers, which are at the cusp of tight supply and high prices.

Market demand for rubber gloves is robust, and this will continue to surge, especially in the third and fourth quarter of the year, according to the Malaysian Rubber Glove Manufacturers Association (Margma). Representing glove makers of Malaysia, which accounts for over 50% of the world market, Margma, while denying there is glut in rubber gloves production, admits to the rising production cost burdening gloves makers in the country. Adding to output cost woes is the rising cost to produce synthetic rubber, due to a looming shortage of its key ingredient butadiene. As expected, the remedy to sustain profit margins is to increase the prices of rubber gloves and add on the higher production cost to consumers. Producers have increased glove prices by US$1 to US$1.50 from September to December 2016. This year, against the back of higher raw materials cost, nitrile gloves prices may be adjusted by US$2.50 to US$3.50 per 1,000 pieces.

Domino effect on rubber gloves price/demand ncreasing prices of both natural and synthetic rubbers affect prices of rubber products such as

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3 JA N U A RY / F E B R U A RY 2 017

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Jan feb issue PRA  
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