Frankfurt, Germany – May 7, 2024 – After a challenging period marked by high costs and supply chain disruptions, the German rubber industry is showing signs of a much-needed recovery. While year-on-year figures remain below 2023 levels, a recent survey by industry association WDK paints a cautiously optimistic picture for the latter half of 2024.
The German rubber industry, a major player in Europe’s manufacturing sector, has faced significant headwinds in recent years. The global chip shortage that crippled the automotive industry significantly impacted demand for tires and other rubber components. Additionally, rising energy prices and logistical bottlenecks further squeezed margins for manufacturers.
Cotton prices edged up in January 2024 (m/m), after declining by 4 percent 2023Q4. Prices were 27 percent lower in 2023 compared to 2022, as global production continued to outpace demand. Last year’s drop was in response to an 8 percent decline in global consumption, attributed to concerns of a slowdown in global growth. During the ongoing season that started in August 2023, a slight recovery in demand of 0.4 percent is expected, while global production is projected to decrease by an estimated 1 percent. Major producing countries, including China, India, and the United States, are expected to experience production declines. Nevertheless, the global stock-to-use ratio (a rough measure of supplies relative to demand) is projected to remain relatively stable at 0.93 in the current season. Cotton prices are likely to rise modestly this year as demand gains momentum amid falling production.
Natural rubber prices continued to increase in January 2024, supported by robust demand. Prices rose by 9 percent (m/m) in January 2024, following a similar increase in 2023Q4. Rubber demand remained resilient in 2023, supported by a recovery in the auto sector, which accounts for nearly two-thirds of global rubber consumption. Despite lower tire production in Brazil, Germany, South Korea, and Russia, global rubber demand rose by 1.4 percent in 2023 (y/y), with increases in China, India, and Thailand compensating for the decline. Weather-induced output declines in Thailand, the world’s largest natural rubber supplier, and Indonesia, were only partially offset by increases in India (+2 percent) and Côte d’Ivoire (+22 percent). Natural rubber prices are expected to gain nearly 4 percent in 2024, driven by a recovery in global consumption.
Post time: May-07-2024