Rubber markets fall on lower China demand, global economic woes

London – Rubber markets have continued to recover from a sharp decline in mid-July, but remain weaker compared to earlier in the summer or the highs of early March.

Despite the recent gains in early August, all rubber markets monitored by ERJ continued to fall over the five weeks to 12 Aug.

The decline in price trends, particularly in Shanghai futures, has been linked to concerns over demand in China and developments within global economy, including the influence of crude oil price movements.

Also influencing the market were the rising uncertainties caused by interest rate hikes globally, and NR supply woes, according to the latest monthly report by the Association of Natural Rubber Producing Countries (ANRPC).

Shanghai contracts for September delivery closed 5% lower compared to 8 July, as active contract month switched to January 23 from September 22 with the position transfer of leading traders.

Osaka rubber futures slipped 7.6% compared to five weeks before, hitting the lowest so far this year.

Physical rubber markets also declined, as supply eased, and demand remained tepid amid China lockdowns and global economic woes.

In its 16 Aug report, the ANRPC said it is anticipating a ‘better-than-expected’ recovery in the NR market in the near future, as the Chinese economy has picked up following a Covid-related slump.

“The [Chinese] government has introduced various measures including central bank cuts [in] interest rates to stimulate the economic recovery from lockdowns and worsening of real estate crisis,” it added.