Natural rubber prices gain as demand picks up

London – Key physical and futures natural rubber (NR) markets regained in the two weeks to 19 Nov, after a sharp decline earlier in the month. 

In Shanghai, the most active rubber contract for May delivery rose 7.7% during the two-week period, while rubber futures in Osaka and Singapore posted more than 4% of growth each.

Weekly average prices also increased in all physical markets monitored by ERJ, with Kottayam RSS4 posting the highest gain at 3%.

In its latest NR market analysis on 22 Nov, the Association of Natural Rubber Producing Countries (ANRPC) linked the gains to a number of factors, including a decision by the US Federal Reserve to maintain interest rates and thereby ‘continuing easy money’ for speculative investments. 

In addition, the global supply of NR remained tight largely due to unseasonal torrential depression rains and floods that affected major rubber-growing regions in Thailand, Malaysia, and India, said ANRPC.

Thailand and parts of Malaysia have also reportedly experienced extended rainy season due to La Nina, while “unfavourable weather” has affected the supply in Vietnam and China’s Hainan province. 

Market sentiment further gained from the news of the virtual meeting between the presidents of the US and China in mid-November, as well as an economic recovery in the EU, as evidenced by a 2.2% GPD growth during the third quarter. 

Shanghai SHFE ru2205:               Yuan14,115/tonne (5 Nov) to Yuan15,205/tonne (19 Nov) – up 7.7%
Osaka RSS3 nearby month:         Yen219.6/kg to Yen229.8/kg– up 4.6%
Singapore SGX TSR20:                 $169.1/100kg to $176.2/100kg– up 4.2%
Kottayam RSS4:                             $237.78/100kg to $244.97/100kg – up 3.0%
Kuala Lumpur SMR20:                  $171.65/100kg to $176.39/100kg–up 2.7%
Kuala Lumpur Latex:                     $130.81/100kg to $133.62/100kg – up 2.1%