London – Natural rubber (NR) prices continued a downward trend over the two weeks to 4 June, despite scaled-up outlook for demand and a general economic recovery in China, the US and Europe.
All Far East markets monitored by ERJ over the two-week period posted a decline, with the most-active rubber contract for September delivery in Shanghai posting a weekly average decline of 2.2%.
RSS3 futures in Osaka tracked a negative trajectory with a 3.2% drop.
In a 4 June market review, the Association of Natural Rubber Producing Countries (ANRPC), said that the end of wintering season across all major producers negatively influenced the prices of the commodity.
According to ANRPC, relatively better prices have prompted larger number of farmers to adopt rain-guarded tapping and major producing countries, such as Vietnam and China, witnessed "marked increase" in production during May.
Furthermore, the association noted that rubber glove manufacturing companies in Malaysia had recently reduced the prices of rubber gloves by around 15%.
To absorb losses, it noted, gloves makers will aim to reduce expenditure on raw materials, “especially the prices offered to NR latex.”
Another factor negatively impacting the market was the resurgence of Covid in India, Malaysia, Thailand, and Vietnam, with a negative bearing on the manufacturing sector.
In the meantime, the ANRPC said that economic recoveries across China, the US and Europe; supply chain disruptions; an anticipated 6.7% growth in annual NR consumption and as well as higher crude prices are likely to support markets in the short-term.
Shanghai SHFE ru2109: Yuan13,675 (21 May) to Yuan13,365 (4 June) down 2.2%
Osaka RSS3 nearby month: Yen251.3/kg to Yen243.2/kg – down 3.2%
Singapore SGX TSR20: $168.8/100kg to $167.8/100kg – down 0.6%
Kottayam RSS4: $235.20/100kg to $ 232.80/100kg – down .01%
Kuala Lumpur SMR20: $168.50/100kg to $168.00/100kg – down 0.3%
Kuala Lumpur Latex: $156.72/100kg to $147.67/100kg– down 5.7%