Interpretation of Supply and Demand Situation of Malaysia's Natural Rubber Latex in July

Interpretation of Supply and Demand Situation of Malaysia's Natural Rubber Latex in July

Supply side: Domestic production falls short of expectations, import volume continues to weaken, and supply is relatively low

In July 2023, Malaysia's natural rubber latex production was 2192 tons, which was basically flat compared to June, a decrease of 18.75% compared to the same period last year. From the seasonal production of natural rubber in Malaysia, it can be seen that after entering June, Malaysia has entered a seasonal increase in production season, with a rapid recovery in raw material output. However, July is also Malaysia’s rainy season, and the overall rainfall situation has slightly increased this year, which has had a certain impact on rubber cutting operations. The actual increase in production during the peak season is not as expected.

In July 2023, Malaysia imported 16500 tons of natural rubber latex, a narrow increase of 9.91% compared to June, a decrease of 25.99% compared to the same period last year. For the major consumer countries of natural rubber latex worldwide, their natural rubber latex production is difficult to meet their own needs, resulting in a high dependence on foreign raw materials. However, based on the overall import situation this year, Malaysia's natural rubber latex import volume has basically remained low, and some months have seen a maximum decline of nearly 50% compared to last year.

Downstream demand: Glove demand remains weak and there is currently no significant growth point

The consumption of natural rubber latex in Malaysia in July 2023 was 27000 tons, which remained relatively flat compared to June and decreased by 27.14% compared to the same period last year. As is well known, in the downstream consumption of natural rubber latex in Malaysia, the consumption of natural rubber latex gloves ranks first, followed by the consumption of rubber thread products. The consumption of foam products and other natural rubber latex products saw a less volume, and the consumption of gloves on natural rubber latex has a significant impact on the overall consumption of natural rubber latex in Malaysia.

This year, whether it is China or Malaysia, the glove industry has been greatly impacted. Since the adjustment of global public health and safety epidemic prevention policies at the beginning of this year, the glove industry has also experienced an unprecedented ‘cold winter’ market. Although some companies have previously expressed that the downturn will soon end, so far, there has been no new demand growth point in the glove industry, The global natural latex glove industry remains weak.

Inventory: Actual demand has declined, while concentrated latex inventory is relatively strong

The inventory of natural rubber latex in Malaysia in Jul 2023 is 16800 tons, and the overall inventory situation is relatively limited compared to June and the same period last year. From the overall situation in 2023, except for the low inventory value in May, the overall changes in inventory levels in other months have been relatively small as of now.

In fact, the overall supply and demand data of natural rubber latex in Malaysia this year is basically in a relatively stable state, with relatively limited fluctuations. This situation basically indicates that the supply and demand situation of natural rubber latex in Malaysia is basically in a low equilibrium state. As its pillar industry, the glove industry, in the absence of other demand growth points, it is expected that the overall supply and demand situation in Malaysia will also maintain a small fluctuation state in the future, with relatively limited changes.