Rubber markets strengthen as supply-demand conditions improve

London – Natural rubber (NR) markets have generally strengthened in recent weeks as the supply and demand conditions remained favourable across Asian markets.

In Shanghai, the most active rubber contract for January delivery posted a 1.3% increase over the two weeks to 13 Aug, while SICOM rubber futures tracked a growth trajectory with a 3.2% gain.

In Osaka, however, RSS3 nearby month prices fell 1.6% as the Japanese yen considerably lost strength against dollar, Thai baht and Malaysian rinngit. 

Physical markets continued to perform better than futures, with a sharp 7.4% increase in Kuala Lumpur latex, driven by tight supply.

In its latest market intelligence report 15 Aug, the Association of Natural Rubber Producing Countries (ANRPC) linked the growth in the first two weeks to the improved demand outlook.

Strong economic recovery in the US and Europe supported demand while Covid-related restrictions continued to weigh on production. 

Furthermore, strong demand outlook, low inventory levels and the oncoming lean NR production season in China have contributed to the strengthening of prices in the Far East markets. 

Shanghai SHFE ru2201:              Yuan14,560/tonne (30 July) to Yuan14,755/tonne (13 Aug) – up 1.3%
Osaka RSS3 nearby month:         Yen226.3/kg to Yen222.6/kg –down 1.6%
Singapore SGX TSR20:                $168.5/100kg to $173.8/100kg– up 3.2%
Kottayam RSS4:                            $228.92/100kg to $238.56/100kg – up 4.2%
Kuala Lumpur SMR20:                  $167.94/100kg to $174.31/100kg – up 3.8%
Kuala Lumpur Latex:                    $117.08/100kg to $125.77/100kg    – up 7.4%