Rubber futures prices maintain upward momentum

Tokyo – Natural rubber future prices closed the trading week ended 8 Sept higher across major Far East exchanges, marking the third consecutive week of growth.

A significant surge in trading volumes was led by fresh speculative buying and short-covering, Japan Stock Exchange (JPX) said in its weekly NR trading review.

In Osaka, Japan, OSE rubber futures for February delivery increased 4.3% week-on-week, amid “record trading volume”, according to the report issued 11 Sept.

In China, SHFE futures for January delivery lifted 4.0%, while INE futures for November contracts recorded a 5.8% increase in heavy trading volumes.

But the highest week-on-week increase was recorded on Singapore’s SICOM exchange, as NR futures rallied 6.5% in 'record' trading volumes, noted the report.

While there were “no apparent fundamental changes" in the rubber demand, JPX said concerns about supply-shortages and optimism over the Chinese economic recovery helped drive up prices.

Furthermore, the effects of the El Nino weather pattern and buying flows of commodity funds also contributed to the recent rebound in NR prices, according to the Tokyo-based firm.

On the supply side, JPX said that 46 rubber processing factories in Indonesia – nearly a third of all factories there - had ceased operations over the past five years.

Furthermore, Malaysia has reported declines in rubber production in recent times, including a 4.5% drop to 28,533 tonnes in July.

The “prolonged rubber price decline” has led to farmers avoiding tapping and processing factories shutting down operations, noted JPX.

On the flip-side, the exchange pointed out that 'if the recent uptick in price trend continues, the slowdown in rubber activities could be reversed.'

On the demand side, meanwhile, the report noted an increase of 2.2% in US rubber shipments in July, the country’s first 'positive signal' this year.

Selected NR futures price trends on major trading exchanges