Natural Rubber Reaches New Peak Having Doubled in 2010

The cost of natural rubber price has reportedly doubled in 2010 and is said to have increased a further 15 per cent during the opening weeks of January 2011, according to an equity research note published by Deutsche Bank analysts Gaetan Toulemonde. So far this month natural rubber costs have continued to surge to US$5.7/kg, a new record high.

The latest development is expected to have a four to six month lag effect. As a result of the roughly 50 per cent increase in natural rubber prices that has taken place in the last 6 months.

Analysts report that tyre makers are likely to increase prices by more than 6 per cent to fully offset the headwind. And strong recovery in demand across Europe and the US during the last quarter of 2010 means they are confident about doing so.

Natural rubber costs represented approximately 40 per cent of raw materials and an estimated 12 per cent of tyre companies’ sales in 2010.

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• Natural Rubber Shortage Will Bring More Tyre Price Hikes

• Natural Rubber Production Growth Slower than Expected