Global prices for natural rubber (NR) soared to a six-month high, with benchmark futures prices on the Tokyo Commodity Exchange (TOCOM) up 27% from the recent low in late August this year.
TOCOM’s RSS3 rubber sheets contract for April 2017 delivery closed at 189.8 Yen per kg on November 8, up 1.4% from the day before.
Since August, synthetic rubber spot prices have been on an upward trend due to rising prices for the raw material butadiene. This has helped push up NR prices, which is used in many of the same applications.
There has also been an influx on China’s Shanghai market of speculative money to commodity futures as a whole. The natural rubber market has risen sharply, giving market participants a sense of security when buying.
China, the world’s largest consumer of rubber, is experiencing strong new car sales in the wake of cuts in vehicle taxes. The demand for rubber used in tyres is increasing as well. The various rubber-producing regions of Southeast Asia are also said to be refraining from discounting shipments to help support prices.
Southern Thailand, a major rubber-producing region, experiences reduced output in the April-June period. The anticipated product shortage during this time is another factor behind the rise in TOCOM futures prices.