Rubber markets weak as China import decline affects demand

London – Far East natural rubber (NR) markets continued to decline in the two weeks to 10 Sept, as the August decline in Chinese imports fuelled concerns over slowing demand.

On 9 Sept, rubber futures in Osaka hit an 11-month low while in Shanghai, the most active rubber contract for January delivery posted a 2.7% decline over the two-week period.

Physical markets also continued to decline, as delays in imports and the resurgence of Covid weakened market sentiment.

With the tapping season in full swing, prices were also under pressure with increased supply across the Far East markets. 

The prices, however, are expected to see a sharp increase in the near future as the market awaits a ‘large-scale’ import from the world’s biggest NR consumer China. 

In its latest market intelligence update 3 Sept, the Association of Natural Rubber Producing Countries (ANRPC) said cited media reports suggesting that the NR inventory is ‘depleting’ in China as manufacturers opted to source their rubber locally to avoid high shipping costs.

“The total inventory has reportedly dropped by190,000 tonnes between the beginning of June and end of August,” said the report. 

As Chinese manufacturers and traders try to replenish the inventory ahead of the offseason, physical markets in Southeast Asia can expect imminent large-scale imports from the country “either in September, or in October,” ANRPC added.

Shanghai SHFE ru2201:               Yuan13,810/tonne (27 Aug) to Yuan13,435/tonne (10 Sept) – down 2.7%
Osaka RSS3 nearby month:         Yen205.5/kg to Yen202.2/kg–down 1.6%
Singapore SGX TSR20:                 $164.8/100kg $160.9/100kg– down 2.3%
Kottayam RSS4:                             $242.11/100kg to $241.42/100kg – down 0.3%
Kuala Lumpur SMR20:                  $170.92/100kg to $161.71/100kg– down 5.3% 
Kuala Lumpur Latex:                     $126.82/100kg  to $122.00/100kg – down 3.8%