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ANRPC: Japan Crisis Has Limited Impact On Rubber Demand

16.03.2011 -

An earthquake which struck Japan and spurred a nuclear crisis will have limited impact on global demand because there is no damage to plants owned by major firms such as Bridgestone and Michelin, the Association of Natural Rubber Producing Countries said on Tuesday.

"The closure of a handful of auto Shin-Etsu Chemical plants in the country's northeast region for a few days cannot impact on the commodity's global demand in a significant way," ANRPC's secretary-general, Djoko S. Damardjati, said in a statement. "If at all there is any marginal impact, it will be for a short-term only."

Japan faced potential catastrophe on Tuesday after a quake-crippled nuclear power plant exploded and sent low levels of radiation floating towards Tokyo, prompting some people to flee the capital and others to stock up on essential supplies.

Japan accounts for 7% of the global demand for natural rubber.

Bridgestone, Japan's largest tire maker, said its five plants in the northeast of Japan were unaffected by Friday's deadly quake, although production had to be stopped due to supply problems and safety considerations, according to the ANRPC.

Toyo Tire & Rubber confirmed the buildings or facilities in any of its plants had not been damaged.

No damage has been reported for Sumitomo Rubber Industries, Yokohama Rubber and Michelin which are the three other auto-tire manufacturing companies running plants in Japan, said the ANRPC.

"A few plants which have to be shut down, due to power supply stoppage and safety concerns, will resume production on restoration of electricity supply."

The quake, however, spurred heavy selling on Tokyo Commodity Exchange, where the benchmark rubber contract, currently August 2011, tumbled 12% to a four-month low.

Tokyo rubber futures  have dropped more than 30% since striking a record around 535 yen a kg in February on worries that unrest in the Middle East could hurt the global economy, and recently after the deadly quake in Japan spurred a nuclear crisis there.