Natural rubber futures fall as Covid cases rise in China

Tokyo – World natural rubber futures closed the trading week ended 27 Nov lower across all rubber exchanges, due mainly to Covid and economic developments in China.

“After the news of new Covid cases in China, the markets experienced liquidation of long positions and further speculative selloffs from traders,” said the Japanese Stock Exchange JPX in its weekly rubber report 28 Nov.

In Osaka, Japan OSE rubber futures fell 2.2%, while SHFE and INE futures in China dropped 0.4% and 2.1%, respectively.

In Singapore, SICOM futures declined 2% “amid new speculative selloffs,” said the JPX report.

According to the report, SHFE’s warehouse rubber stocks fell 54% to 148,585 tonnes on yearly expiration, while INE’s stocks also decreased by 3,356 tonnes during the week.

JPX linked the decline in rubber prices to a number of China-related developments, including the introduction of new lockdowns as the country’s Covid cases increased to another record high of 32,695 on 26 Nov.

In addition, the Yuan further strengthened against the dollar, continuing downward pressure on Chinese stocks.

“The struggling Chinese economy has put downward pressure on rubber prices,” the report added.

In Japan, meanwhile, consumer price index rose 3.6% year-on-year in November, hitting a 40-Year high, while the manufacturing PMI recorded “a weaker number” at 49.4.