NR prices recover in August, deficit continues  

Kuala Lumpar - Natural rubber prices showed signs of recovery from a dip in late July, thanks to favourable market fundamentals and supply deficit, the Association of Natural Rubber Producing Countries (ANRPC) has reported.

In a review of trends and statistics in August, the association said global NR production reached 8.038 million tonnes within the first eight months of the year. Consumption was estimated at 8.544 million tonnes.

According to ANRPC, physical prices were also influenced by other external factors, such as developments in the oil industry, inventories in regional futures markets, currency moves and recent geopolitical tensions.

NR prices have been following a positive trend since end of June, with markets showing clear signs of stabilisation since the sharp hikes and then reversals in first half of the year.

Trading in Far East markets in July and August was mostly influenced by a recovery in crude oil prices, as well as the negative impacts of higher rubber inventories on regional futures markets.

On the Shanghai Futures Exchange, ERJ’s analysis found the closing price for RU1801 – the most heavily traded NR future –  at Yuan16,545/tonne on 30 Aug. This was 7% above a level recorded at the end of July and 34% higher than an eight-month low of Yuan12,310/tonne noted in early June.

On Japan’s TOCOM, meanwhile, back-month prices for reference RSS3 materials remained flat at ¥216.1/kg, despite a dip observed in early August to ¥201.0/kg. The trends, again, marked a significant stabilisation compared to the volatility of the first-half.

In Bangkok, spot prices for RSS1 grades on 31 Aug stood at $191.95/100kg showing 7% recovery from the previous month’s $179.35/100kg –continuing a positive trend started in June. RSS3 in the meantime showed a similar 7% rise with prices standing at $188.50/100kg at close-of-business 31 Aug.

In Kuala Lumpur, prices for SMR-20 rose to $153.30/100kg, showing a steady recovery since June and a 5% increase since the beginning of August. Latex prices, meanwhile, registered a 2% drop compared to July at $128.20/100kg also as of 31 Aug.