Natural rubber prices head south

London - Any lingering hopes of a near-term recovery in natural rubber (NR) prices all but evaporated last week as indices in key Asian trading centres of all headed south.

The most significant decline was on the Shanghai Futures Exchange (SHFE), where rubber futures seemed caught up in the general malaise afflicting Chinese stock markets.

Price for September rubber futures fell 8.0 percent between 3-10 July to end the week  at Yuan12,165/tonne, while October futures came in 7.9-percent lower at Yuan11,980/tonne.

Given the scale of the declines in China, it was not surprising to see pricing trends on other Asian rubber trading centres remain in negative territory.

On the Tokyo Commodity Exchange, the back month price for natural rubber at Yen211.0/kg, was  3.7 percent lower at the end of trading on 10 July than the prior-week figure.

In Thailand, prices for RSS3 fell 3.5 percent week-on-week in Bangkok to $165.8/100kg, while Kuala Lumpur prices for SMR20 fell 2.8 percent to $145.1/100kg

The negative trend is, reportedly, creating headaches for synthetic rubber (SR) producers, who are caught between rising feedstock costs and the ability of rubber buyers to resist price increases.

The downward pressure on pricing was being linked particularly to tire manufacturers, who are able to choose between SR and NR for compound formulations.