2022 JAN - LGM - Malaysian Rubber Board

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Natural Rubber Market Review

January The Kuala Lumpur rubber market traded mixed towards an uptrend in the first half of January 2022 before declining gradually after mid-month. Market recovery was driven by encouraging global manufacturing activities, tighter natural rubber supply, China’s supportive measures to prop up their slowing economy, the rally in crude oil prices and brighter prospect of NR demand from positive auto sales growth. However, further gains were halted by weaker 2022 economic outlook forecasted by both World Bank and International Monetary Fund (IMF) amid surging Omicron cases globally, geopolitical tensions in Central Asia and Middle East as well as an increase in inflation rate globally. U.S. Federal Reserve's monetary policy tightening that might start in March further pressured market sentiment. Compared with those on 30 December 2021, the price of SMR 20 was down by 7.5 sen/kg or 1.0% to close at 726.50 sen/kg. Meanwhile, latex concentrate closed at 589.50 sen/kg, an increase of 70.5 sen/kg or 13.6%. Price movements of selected grades of rubber in January 2022 are shown in Table 1.

The recovery observed in January were driven by firmer advice from regional rubber futures markets from bargain-hunting activities, China’s policy support measures and some encouraging economic data, tighter global NR supply, surging crude oil prices and the ringgit that remained weak against the U.S. dollar. China cut its lending benchmark loan prime rate (LPR) in a bid to prop up the slowing economy as the 2021 quarter 4 GDP merely expanded 4% despite an 8.1% GDP expansion in 2021. The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.70% from 3.80%. And the five-year LPR was reduced by 5 basis points to 4.60% from 4.65%. The People's Bank of China (PBOC) also lowered the interest rate of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95%. According to the China Association of Automobile Manufacturers (CAAM), China's auto sales in 2021 rose 3.8% year on year (y-o-y) to 26.28 million units, ending a downward trend that began in 2018. In addition, easing China factory-gate inflation in December as the government took steps to contain lofty raw material prices gave the market another lift. Department of Statistics Malaysia reported that natural rubber (NR) production decreased by 25.8% in November compared year-on-year (y-o-y), owing to supply

Table 1: Reference Prices (Noon) of SMR CV, SMR 20 and Centrifuged Latex (60% DRC), January 2022

Source: Malaysian Rubber Board (MRB)

SMR CV SMR 20

Centrifuged Latex (60% DRC)

sen/kg RM/tonne sen/kg RM/tonne

sen/kg RM/tonne

Highest 1,003.50 10,035.00 758.00 7,580.00 590.00 5,865.00

Lowest 895.00 8,950.00 718.00 7,180.00 525.00 5,115.00

Average 973.47 9,734.70 734.05 7,340.50 572.08 5,394.50

Change from the last day of the previous month

117.50 1,175.00 -7.50 -75.00 70.50 705.00

2022

JA

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A monthly publication of the Malaysian Rubber Board

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Reference Prices (Noon) for SMR 20 and Centrifuged Latex (60% DRC) 2 February 2021 - 28 January 2022

Reference Prices (Noon) for SMR 20 and Centrifuged Latex (60% DRC), January 2022

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disruptions from weather uncertainties and COVID-19 restrictions in Southeast Asia rubber producing countries. International Rubber Study Group (IRSG) expected NR production to recover by 5.7% in 2021 y-o-y, reaching 13.79 million tonnes. It was reported that crude oil prices surged as supply disruptions in Kazakhstan, Libya, tensions in Russia-Ukraine and the Middle East offset worries on escalating cases of the highly contagious Omicron variant of the COVID-19 around the globe, increased U.S. stockpiles and profit taking activities. Furthermore, the ringgit remained weak against the US dollar in January 2022 at RM4.1710 - RM4.2030, compared with RM4.1705 - RM4.2335 in December 2021.

Nevertheless, prices were dragged down by losses in the regional rubber futures markets driven by fresh selling activities amid escalating worries about potential military conflict in Ukraine, a faster pace of U.S. Federal Reserve policy tightening, a slowing economy in China and fears that continued bottlenecks in global supply chains will hinder car production recovery. U.S. 2021 quarter four GDP growth recorded 6.9% with a 5.7% GDP in 2021, supporting the U.S. Federal Reserve's plan towards raising interest rates in March. The U.S. Federal Reserve reaffirmed its plans to end its bond purchases in March in a sustained battle to tame inflation. Market sentiment was also dented by cooling global economic recoveries and growth. The World Bank cut its forecasts for economic growth in the United States (2022: 3.7% and 2023: 2.6%) and China (2022: 5.1% and 2023:5.2%). World Bank warned that high debt levels, rising income inequality and new COVID-19 variants threatened the recovery in developing economies. It said global growth is expected to decelerate "markedly" to 4.1% in 2022 from 5.5% last year and drop further to 3.2% in 2023 as pent-up demand dissipates and governments unwind massive fiscal and monetary support provided early in the pandemic. On the other hand, the IMF expects to raise its forecast that the COVID-19 pandemic will cost the global economy USD12.5 trillion through 2024. IMF cut its world economic growth forecast for 2022 to 4.4% as the COVID-19 pandemic enters its third year, citing weaker prospects for the US and China along with persistent inflation. The International Labour Organization (ILO) reported that the global job market will take longer to recover than previously thought, with unemployment set to remain above

pre-COVID-19 levels until at least 2023 due to uncertainty about the pandemic's course and duration. According to the National Statistics Bureau, China's official manufacturing PMI stood at 50.1. Outlook The market is expected to be quiet in the first week of February in the absence of Chinese players due to Chinese New Year holidays. Price movements are expected to track the performance of regional rubber futures markets, crude oil prices, the ringgit against the USD on top of the COVID-19 variant uncertainties. Market players will also monitor the global economic conditions especially on government and central bank policies that supports the economy while reducing inflation. News Briefs

Euro zone factory growth stayed strong in Dec as supply issues eased Manufacturing activity in the euro zone remained resilient at the end of 2021 as factories took advantage of an easing in supply chain bottlenecks and stocked up on raw materials at a record pace, a survey showed. IHS Markit's final manufacturing Purchasing Managers' Index (PMI) dipped to 58.0 in December from November's 58.4, matching an initial "flash" estimate and still comfortably above the 50 mark separating growth from contraction.

- reuters.com, 3 Jan

China's Dec factory activity returns to growth, beats forecasts China's factory activity grew at its fastest pace in six months in December, driven by production hikes and easing price pressures, but a weaker job market and business confidence added uncertainty, a private survey showed. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) rose to 50.9 in December - its highest level since June.


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U.S. manufacturing catches breath; supply logjam starting to break up U.S. manufacturing activity slowed in December amid a cooling in demand for goods, but supply constraints are starting to ease and a measure of prices paid for inputs by factories fell by the most in a decade. The ISM's index of national factory activity fell to a reading of 58.7 last month, the lowest level since January 2021, from 61.1 in November. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy.


China will ensure stable economic growth in Q1, premier says China will ensure stable economic growth in the first quarter of 2022, state radio quoted Premier Li Keqiang as saying. The government will implement greater tax and fee cuts for businesses and would provide targeted support for COVID-affected sectors such as services, Li was quoted as saying. China would extend existing tax breaks and increase deductions for research and development (R&D) expenses when companies calculate their income tax, Li added.

- channelnewsasia.com, 5 Jan

UK new car sales 29% below pre-pandemic level in 2021 New car registrations in Britain last year grew slightly from 2020 but were still far below pre-pandemic levels, reflecting a shortage of semiconductors as well as the direct impact of the pandemic, the industry said. Some 1.65 million new cars were registered in Britain in 2021, 1.0% more than in 2020 but 28.7% fewer than in 2019, according to preliminary figures from the Society of Motor Manufacturers and Traders (SMMT).


Indian Rubber Board plans advance lab for testing rubber products In a move aimed at augmenting the competence of Indian rubber products across Europe, the Rubber Board is all set to commission an advanced analysis laboratory at the Rubber Research Institute here. The new facility, to be commissioned on January 11, will enable exporters to conduct independent third-party testing of rubber products for compliance with European Union regulations and manufactures in the MSME (micro, small and medium enterprises) sector to design product formulations. The agency already has a National Accreditation Board for Testing and Calibration Laboratories-approved laboratory for conducting product testing as per national and international specifications.

- thehindu.com, 8 Jan China, Sri Lanka promise to boost ties, carrying forward spirit of Rubber-Rice Pact Visiting Chinese State Councilor and Foreign Minister Wang Yi and Sri Lankan leaders pledged in Colombo to further develop bilateral relations, carrying forward the spirit of the Rubber-Rice Pact. The Rubber-Rice Pact was signed in December 1952 when China needed to import rubber and other supplies and Sri Lanka, for whom rubber was a key export, was facing a rise in the price of rice and slump in the price of rubber.

- news.cgtn.com, 10 Jan

Glove makers face increased competition, normalising profitability The rubber glove industry will have to contend with normalising profitability this year due to heightened competition and global vaccination progress since demand has come off its peak seen in the first quarter of 2021 due to the COVID-19 pandemic. Since the strong performance of the glove sector in the last two years, MIDF Research head Imran Yassin Md Yusof pointed out that many new players, especially from China, have entered the market to get a share of the business. “As such, competition is intensifying among both incumbent players and new entrants

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which could further push the average selling price (ASP) downwards,” he told SunBiz.

- anrpc.org, 10 Jan

World Bank sees sharp world growth slowdown, 'hard landing' risk for poorer nations The World Bank cut its forecasts for economic growth in the United States, the Euro area and China and warned that high debt levels, rising income inequality and new coronavirus variants threatened the recovery in developing economies. It said global growth is expected to decelerate "markedly" to 4.1% in 2022 from 5.5% last year, and drop further to 3.2% in 2023 as pent-up demand dissipates and governments unwind massive fiscal and monetary support provided early in the pandemic.

- reuters.com, 12 Jan U.S. economy can withstand Fed tightening, Omicron surge, Powell says Federal Reserve Chair Jerome Powell, in a congressional hearing that pointed to his likely confirmation for a second term as head of the U.S. central bank, said the economy should weather the current COVID-19 surge with only "short-lived" impacts and was ready for the start of tighter monetary policy. Powell was openly endorsed by Republicans and Democrats on the Senate Banking Committee in a session which focused largely on how the Fed planned to address inflation running at multi-decade highs, why the central bank misdiagnosed the surge in price increases, and what stricter monetary policy would mean for job growth.

- reuters.com, 12 Jan Latest World Rubber Industry Outlook from IRSG The total rubber demand is estimated to recover by 9.4% in 2021 (y-o-y), reaching 29.57 million tonnes, exceeding the pre-pandemic level. The global rubber demand in tyre sector is estimated to recover by 8.6% in 2021 from a deeper contraction (-8.1%) experienced in 2020. A

stronger recovery projected for non-tyre sector (10.5%). Total rubber demand is forecasted to moderate to 3.6% in 2022 and expected to grow on an average by 2.3% during 2023-2030 under the Base Scenario, slightly lower than our last forecast in July. The global Natural rubber (NR) demand surged by 9.4% in 2021 (y-o-y), reaching 13.88 million tonnes, owing to sharp recovery expected in CV replacement segment in the mature and emerging markets. The world Synthetic Rubber (SR) demand increased by 9.5% reaching 15.69 million tonnes in 2021 (y-o-y) and is forecast to further expand by 4.2% in 2022 supported by solid growth in the US, China, Russia and India. NR production recovered by 5.7% in 2021 (y-o-y), reaching 13.79 million tonnes, still lower than its 2018 peak. Resurgence of COVID-19 variants in major producing countries which later led to restriction measures on supply chain and labour shortage have contributed to the slower recovery in NR production. Total NR production is forecast to further grow by 3.5%, reaching 14.27 million tonnes in 2022 and exceeding the pre-pandemic 2019 level. NR production growth is estimated to moderate to 3.7% in 2023.

- rubberstudy.org, 12 Jan US consumer prices post biggest rise in nearly 40 years; inflation close to peaking US consumer prices increased solidly in December as rental accommodation and used cars maintained their strong gains, culminating in the largest annual rise in inflation in nearly four decades, which bolstered expectations that the Federal Reserve will start raising interest rates as early as March. The consumer price index (CPI) rose 0.5% last month after advancing 0.8% in November. In addition to higher rents, consumers also paid more for food, though the 0.5% increase in food prices was less than in the prior three months. In the 12 months through December, the CPI surged 7%. That was the biggest y-o-y increase since June 1982 and followed a 6.8% rise in November.


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Tight labor markets drive up wages; inflation keeps lid on growth: Fed Tight labor markets fueled robust wage growth nationwide at a time when supply chain issues continued to keep the pace of inflation elevated, according to the Federal Reserve's Beige Book released. “Economic activity across the United States expanded at a modest pace in the final weeks of 2021, but growth continued to be constrained by ongoing supply chain disruptions and labor shortages,” the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through 3

rd January.

- investing.com, 12 Jan

China's auto sales up 3.8% in 2021 China's auto sales in 2021 rose 3.8% year-on-year (y-o-y) to 26.28 million units, ending a downward trend that began in 2018, data from the China Association of Automobile Manufacturers (CAAM) showed. Last year's auto production rose 3.4% y-o-y to 26.08 million units, according to the data. In December 2021, auto sales totaled 2.79 million units, down 1.6% y-o-y, according to the CAAM.

- xinhuanet.com, 12 Jan

Vietnam ranks third worldwide in terms of rubber export value Vietnam ranked third in the world in terms of rubber export value, with 3.24 billion USD in 2021, up 36.2% from the previous year, the Ministry of Agriculture and Rural Development (MARD) said. Vietnamese rubber has been present in more than 80 countries and territories, and the sector has penetrated more intensively in major markets. The Vietnam Rubber Association (VRA) said the sector makes up a large share of the country’s agricultural product exports, with tyres, gloves and rubber gaskets considered drivers of the industry. Last year, the Vietnam Rubber Group (VRG) churned out 402,900 tonnes of rubber latex, surpassing its set target by 6% and up 30,000 tonnes from the previous year.

- en.vietnamplus.vn, 12 Jan

China's 2021 trade surplus with U.S. at USD396.58 billion China's trade surplus with the United States was USD39.23 billion in December and USD396.58 billion for the whole of 2021, data from China's General Administration of Customs showed.

- reuters.com, 13 Jan Indian Rubber board aims to quadruple rubber goods exports in next 25 years According to K.N.Raghavan, the Board's Executive Director, the Rubber Board's goal for the next 25 years is to quadruple India's export of rubber goods from the current earnings of 25,000 crores. "It is the Rubber Board's responsibility to assist exporters, particularly those in the MSME sector, in any way possible," he said during the commissioning of the Advanced Analysis Laboratory for Rubber Products at the Rubber Research Institute of India.

- krishijagran.com, 13 Jan Malaysia rubber production decreased by 26.8 per cent in November 2021 Natural rubber (NR) production decreased by 26.8% in November 2021 (31,577 tonnes) as compared to October 2021 (43,127 tonnes). Year-on-year comparison also showed that the production declined by 25.8% (November 2020: 42,554 tonnes). The decline in production was due to supply disruptions at the supply level because of weather uncertainties as well as high rainfall distribution factors. Total stocks of natural rubber (NR) decreased 4.2% in November 2021 to 269,757 tonnes as compared to 281,718 tonnes in October 2021. Exports of Malaysia's natural rubber amounted to 60,942 tonnes in November 2021, decreased by 2.0% as against October 2021 (62,167 tonnes).

- dosm.gov.com, 14 Jan

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U.S. manufacturing output unexpectedly falls in December on autos Production at U.S. factories unexpectedly fell in December, pulled down by a decline in output at motor vehicle plants amid an ongoing global semiconductor shortage. Manufacturing output dropped 0.3% last month after increasing 0.6% in November, the Federal Reserve said. Economists polled by Reuters had forecast factory production rising 0.5%. Output increased 3.5% compared to December 2020.


China's Q4 GDP beats forecasts but momentum cooling China's economic growth was faster than expected in the final quarter of 2021 but still its weakest pace in one-and-half years, with the central bank cutting loan rates to cushion slowing momentum in the world's second-largest economy. Gross domestic product (GDP) expanded 4.0% in the October-December period from a year earlier, against 4.9% growth in the third quarter, National Bureau of Statistics (NBS) data showed. Analysts had forecast a rise of 3.6% in a Reuters poll. The economy grew 8.1% in 2021, faster than a forecast 8.0% and well above a government target of "above 6%" and 2020's revised growth of 2.2%.

- investing.com, 14 Jan China cuts rates on policy loans, analysts point to more easing ahead China's central bank on unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, while some market analysts expect more policy easing this year to cushion an economic slowdown. The People's Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan (USD110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.


Global jobs recovery delayed by pandemic uncertainty, Omicron, ILO says The global job market will take longer to recover than previously thought, with unemployment set to remain above pre-COVID-19 levels until at least 2023 due to uncertainty about the pandemic's course and duration, the International Labour Organization (ILO) said in a report. The U.N. agency estimates the equivalent of around 52 million fewer jobs in 2022 versus pre-COVID levels, which amounts to about double its previous estimate from June 2021.


China calls for building an open world economy to create better post-COVID world The World Economic Forum's (WEF) Global Risks Report warned that economic stagnation is the most serious challenge persisting from the COVID-19 pandemic. However, China is injecting confidence into the world economy with official data released showing its economy posted stable growth in 2021. Building an open world economy, embracing cooperation against the pandemic and revitalizing global development – the three aspects highlighted in Chinese President Xi Jinping's speech at the WEF virtual session – are clues to the answer, as well as the solutions to other major global challenges.

- news.cgtn.com, 17 Jan China central bank to roll out more policy moves to stabilise growth China's central bank will roll out more policy measures to stabilise the economy and move ahead of the market curve as downward pressure persists, vice governor Liu Guoqiang said, following the latest rate cut. "Before the downward pressure on the economy is fundamentally relieved, we should introduce more policies that are conducive to stability, and should not introduce policies that are not conducive to stability," Liu told a news conference.


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European new car sales down 1.5% in 2021 – ACEA New car registrations in Europe fell 1.5% in 2021, even further below the previous record low of 2020 sales, industry data showed. A global semiconductor shortage and other supply chain issues have dampened deliveries of cars globally, with many carmakers sitting on half-finished goods and unable to meet demand. The number of new vehicles registered in the European Union (EU), Britain and the European Free Trade Association (EFTA) in December was down 21.7% year-on-year (y-o-y), marking the sixth month in a row of declines.

- reuters.com, 18 Jan Fed to raise rates three times this year to tame unruly inflation: Reuters poll The U.S. Federal Reserve will tighten monetary policy at a much faster pace than thought a month ago to tame persistently high inflation, now viewed by economists polled by Reuters as the biggest threat to the U.S. economy over the coming year. Median forecasts from the 12

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January. Reuters poll showed the Fed raising its key interest rate three times this year, starting in March, to 0.75-1.00% by end-2022, a significant upgrade from two hikes predicted in the December survey. A strong minority, 40 of 86 analysts, expected the central bank to hike at least four times this year, in line with current market pricing.

- reuters.com, 20 Jan China cuts key rates, stepping up monetary stimulus effort to underpin economy China stepped up its monetary easing efforts to prop up a slowing economy this week by lowering a set of key policy rates and lending benchmarks, and markets believe Beijing could ease further before growth bottoms out. The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.70% from 3.80%. And the five-year LPR was reduced by 5 basis points to 4.60% from 4.65%, the first reduction

since April 2020. The LPR cuts were expected after official comments called for more monetary easing to prop up the broad economy.

- theedgemarkets.com, 20 Jan

IMF sees cost of COVID pandemic rising beyond USD12.5 trillion estimate The International Monetary Fund expects to raise its forecast that the COVID-19 pandemic will cost the global economy USD12.5 trillion through 2024, the head of the global lender said. IMF Managing Director Kristalina Georgieva told an event hosted by the Financial Times that supply chain disruptions, inflation and tighter monetary policy were "throwing cold water on the recovery everywhere."


US weekly jobless claims at three-month high amid Omicron wave The number of Americans filing new claims for unemployment benefits jumped to a three-month high last week, likely as a winter wave of COVID-19 infections disrupted business activity, which could weigh on job growth in January. Initial claims for state unemployment benefits surged 55,000 to a seasonally adjusted 286,000 for the week ended 15

th January, the highest level since

mid-October. The increase was the largest since last July. Economists polled by Reuters had forecast 220,000 applications for the latest week.

- thestar.com.my, 21 Jan China to cut interest rates on standing lending facility loans on 21

st January sources

China's central bank will cut interest rates on its standing lending facility loans for all tenors, three sources with direct knowledge of the matter said, following similar reductions in other liquidity tools. The borrowing cost on overnight, seven-day and one-month loans will be lowered by 10 basis points to 2.95%, 3.10% and 3.45%, respectively, according to the sources.

- nasdaq.com, 21 Jan

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IMF chief warns world economy faces an ‘obstacle course’ this year The head of the IMF said that the global economy would have to navigate an “obstacle course” this year with the ongoing pandemic and geopolitical tensions deepening a global inflation problem. Speaking at the virtual World Economic Forum (WEF) held instead of the normal in-person gathering at Davos, Kristalina Georgieva warned that the outlook for the global economy this year would be far from smooth. “2022 is like navigating an obstacle course,” the fund’s managing director said.

- ft.com, 21 Jan

China’s development contributing to global economy China’s sustainable and sound economic development has continuously made positive contributions to the world against the backdrop of the recurrent COVID-19 pandemic, which poses challenges to the world economic recovery, Foreign Ministry spokesperson Zhao Lijian said. The comments came after several business reports highlighted foreign companies’ confidence in investing in the Chinese market. In 2021, China’s GDP hit USD17.7 trillion, accounting for over 18% of the global economy, and China is estimated to contribute roughly 25% of global economic growth.

- globaltimes.cn, 24 Jan Euro zone recovery stumbled in Jan as Omicron hit services –PMI The euro zone economic recovery weakened this month, despite an upturn in Germany where factories benefited from an easing in supply chain bottlenecks, as renewed restrictions put a dent in the bloc's dominant services industry, a survey showed. IHS Markit's Flash Composite Purchasing Managers' Index, seen as good gauge of overall economic health, dropped to 52.4 in January from 53.3 in December, its lowest since February and below the 52.6 predicted in a Reuters poll.


Vietnam's rubber exports to continue growing in 2022: Experts Vietnam’s rubber export revenue is expected to reach 3.5 billion USD in 2022, and rubber price would rise to 3.8 USD per kg in the second half of the year, experts have said. According to the Ministry of Industry and Trade (MoIT)’s Agency for Foreign Trade, Vietnam shipped abroad 1.97 million tonnes of rubber worth 3.3 billion USD last year, up 12.9% in volume and 39% in value year-on-year (y-o-y).

- en.vietnamplus.vn, 24 Jan China auto watch - 4Q21: EVs to drive growth after volume losses from chip shortages China’s passenger-vehicle (PV) wholesale deliveries rebounded by 6.5% from a year earlier to 21.5 million units in 2021, marking a recovery to the pre-Covid-19 level after dropping 6% in 2020. This was driven by a 168% surge in electric-vehicle (EV) sales, accounting for 15.5% of PV sales in 2021. Internal combustion engine (ICE) car sales declined further by 4% due to widespread microchip shortages. Fitch Ratings expects strong EV sales and restocking at dealers to drive growth in China’s 2022 PV deliveries to at least mid-single digits.

- fitchratings.com, 24 Jan IHS Markit: Global inflation will likely remain near 5% in early 2022 before gradually easing Global growth is projected to slow to 4.2% in 2022, slightly below last month’s forecast owing to weaker performances in Western Europe, North America, mainland China and Japan. IHS Markit said global real gross domestic product (GDP) growth will settle to 3.4% in 2023 and 3.1% in 2024 as fiscal and monetary policies tighten and pent-up consumer demand is satisfied. Global consumer price inflation reached 5.2% year-on-year in November and December 2021, its highest pace since September 2008. “Worldwide inflation will likely remain near 5% in early 2022 before gradually easing in response to declines in industrial and agricultural commodity prices.

- theedgemarkets.com, 25 Jan

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U.S. business activity slows in January amid Omicron wave U.S. business activity grew at its slowest pace in 18 months in January as a winter surge in COVID-19 infections worsened worker shortages at factories, though demand remained strong. Data firm IHS Markit said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a reading of 50.8 this month from 57.0 in December. That was the lowest level since July 2020. A reading above 50 indicates growth in the private sector.


IMF cuts 2022 world economic growth forecast to 4.4% on weaker US, China outlooks The International Monetary Fund (IMF) has cut its world economic growth forecast for 2022 as the COVID-19 pandemic enters its third year, citing weaker prospects for the US and China along with persistent inflation. The global economy will expand 4.4% this year, down from an estimate of 4.9% in October, the Washington-based IMF said in its World Economic Outlook. The fund forecast 3.8% growth for 2023, up from the prior projection, but cumulative expansion for the two years will still be 0.3 percentage point less than previously forecast.

- theedgemarkets.com, 25 Jan Escalated Russia-Ukraine conflict would keep inflation higher longer – IMF An escalated conflict between Russia and Ukraine would likely further increase energy costs and commodities prices for many countries, keeping headline inflation rates elevated for longer, a top IMF official said. First Deputy Managing Director Gita Gopinath told Reuters the situation now was far different than in 2014 when Russia annexed the Crimea region of Ukraine, and energy prices fell quite sharply amid low demand and ample shale gas supplies.


India’s NR production for FY2022 may fail to hit target It is likely that recent conditions in India, such as the surging Omicron variant, heavy rains in October-November 2021 in country’s main rubber-growing region of Kerala, as well as the cold wave in the North Eastern states which impacted demand, could combine to slow natural rubber (NR) production to below the FY22 target of 800,000 tonnes. Nonetheless, production is expected to be higher than during the previous financial year. In 2020-21, India’s NR production registered at 715,000 tonnes-marginally higher than during the previous fiscal year.

- irjournal.com, 26 Jan Cambodian exports of rubber bounce beyond USD611M in 2021 as demand booms Cambodian rubber exports topped USD611,770,814 million in 2021, climbing up from USD482 million a year earlier. Broken down by category, 366,300 tonnes of natural rubber latex accounted for USD610,255,800, and 454 cubic metres of rubber wood clocked in at USD1,515,015, according to the General Department of Rubber. Department head Him Aun told The Post that the increase was due to demand booming over the supply, an uptick in rubber trees that are tapped for latex, and to a lesser degree, rising crude oil prices, and improved China-US trade and economic cooperation.

- phnompenhpost.com, 26 Jan

Fed likely to hike rates in March as Powell vows sustained inflation fight The Federal Reserve said it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what U.S. central bank chief Jerome Powell pledged will be a sustained battle to tame inflation. "The committee is of a mind to raise the federal funds rate at the March meeting assuming that

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the conditions are appropriate for doing so," Powell said in a news conference, pinning down a policy statement from the central bank's Federal Open Market Committee (FOMC) that only said rates would rise "soon."

- thestar.com.my, 27 Jan China's Dec industrial profits grow at slowest pace since April 2020 Profits at China's industrial firms grew at a slower pace in December, the statistics bureau said, as factory-gate inflation continued to ease, pointing to cooling demand amid mounting economic challenges. Profits rose 4.2% year-on-year (y-o-y), the slowest rate since April 2020, to 734.2 billion yuan (USD115.89 billion), compared with a 9% gain in November. For 2021, industrial firms' profits rose by a whopping 34.3% y-o-y to 8.7 trillion yuan, the National Bureau of Statistics (NBS) said.

- channelnewsasia.com, 27 Jan

Dearth of chips Drives UK car production to lowest since 1956 British car production last year fell to its lowest since 1956, largely due to a global shortage of semiconductor chips that caused automakers to slow or shutter plants while waiting for parts, an industry group said. The Society of Motor Manufacturers and Traders (SMMT) said production fell 6.7% from 2020 to 859,575 vehicles and was 34% below the pre-pandemic year 2019. The SMMT said it expected the shortage to ease this year and cited independent production forecasts that British car output should increase 19.7% to above 1 million vehicles.

- reuters.com, 27 Jan China says U.S. should correct wrongdoing in trade practices against China The United States should take immediate action to correct wrongdoing in trade practices against China, China's commerce ministry said, after the WTO ruling that let China impose tariffs on U.S. goods. The WTO ruling is of great significance for correcting illegal countervailing practices of the

United States and safeguarding the trade interests of Chinese firms, the ministry said in a statement on its website.


WTO lets China impose tariffs on U.S. in Obama-era case The World Trade Organization (WTO) authorised China to impose USD645 million of compensatory tariffs against the United States, a ruling that was immediately blasted by Washington. China went to the WTO in 2012 to challenge anti-subsidy tariffs the United States imposed between 2008 and 2012, mainly during the term of U.S. President Barack Obama, on 22 Chinese products ranging from solar panels to steel wire.


Fiscal stimulus powers U.S. economy in 2021 to its best performance since 1984 The U.S. economy notched its strongest growth in nearly four decades in 2021 after the government pumped trillions of dollars in COVID-19 relief, and is seen forging ahead despite headwinds from the pandemic, strained supply chains as well as inflation. The economy grew 5.7% in 2021, the strongest since 1984, as the government provided nearly USD6 trillion in pandemic relief. It contracted 3.4% in 2020, the biggest drop in 74 years. It was the first time in 20 years that the U.S. economy grew faster than the Chinese economy.

- reuters.com, 28 Jan China's 2022 crude imports seen rebounding on new refineries, inventory refill China's crude oil imports could rebound by 6-7% this year, reversing 2021's rare decline as buyers step up purchases for new refining units and to replenish low inventories, analysts and oil company officials said. Demand recovery, however, is not expected until the second half of the year as China continues to combat COVID-19 outbreaks and limit production by smaller refiners. For 2022, crude oil imports into China look set to grow by 600,000-700,000 barrels per day (bpd),

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offsetting last year's 590,000 bpd fall to match or beat 2020's record volume of 10.85 million bpd, analysts at FGE, Rystad Energy and Energy Aspects told Reuters.


Malaysian rubber products showcased at Expo 2020 Dubai The Malaysian Rubber Council (MRC) is showcasing made-in-Malaysia rubber products in Expo 2020 Dubai at the Malaysia Pavilion to tap the Middle East and North Africa (MENA) market. Capitalising on the expo's global reach, MRC has also launched the Malaysian Rubber Products Virtual Showcase (MaRViS), an online platform to facilitates online business engagements between international buyers and Malaysian rubber product manufacturers. Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin launched the Rubber Forum 2022 via online at the Malaysia Pavilion. The forum was to share Malaysia's sustainable rubber industry and highlight emerging global trends as well engage potential global rubber players, especially in Middle East, for strategic collaborations and investment opportunities. In 2021 (Jan-Oct), the rubber industry contributed RM63.16 billion in export earnings to Malaysia, an increase of RM26.16 billion or 71 per cent higher compared to the previous year. The current COVID-19 pandemic generated a substantial additional demand for rubber gloves and other rubber-based healthcare products.

- nst.com.my, 29 Jan China Jan factory activity growth slows, demand wanes as COVID surges Growth in China's factory activity slowed in January as a resurgence of COVID-19 cases and tough lockdowns hit production and demand, but the slight expansion offered some signs of resilience as the world's second-largest economy enters a likely bumpy new year. The official manufacturing Purchasing Manager's Index (PMI) registered 50.1 in January, remaining above the 50-point mark that separates growth from contraction, but slowing from 50.3 in

December, data from the National Bureau of Statistics (NBS) showed on Jan 30. Analysts had expected the PMI to fall to 50.


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October 2021p

Total: 97,262 tonnes Total: 100,516 tonnes

Malaysia’s Imports of NR by Countries of Origin, November 2021p

Malaysia’s NR Exports by Countries, November 2021p

October 2021p

Note: P = provisional Total: 88,079 tonnes So

Total: 89,671 tonnes

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Published by the Malaysian Rubber Board, 148 Jalan Ampang, 50450 Kuala Lumpur, Malaysia. Tel: 603-9206 2000 Fax: 603-2161 6586

Malaysia’s NR Exports by Types, November 2021p


October 2021p


Malaysia’s NR Consumption by Product Sectors, November 2021p

Note: P = provisional Total: 43,540 tonnes

October 2021p

Source: Department of Statistics Malaysia (DOSM)


2022 JAN - LGM - Malaysian Rubber Board

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