Tire recyclers are largely dependent on the natural rubber (NR) prices, thus it is important to monitor them regularly to predict company’s revenues in the next periods. To help recyclers, weibold! delivers news on NR developments.

Over two month ago, a price rally of natural rubber commenced. During four trading weeks of November, prices significantly changed, as shown by the ERJ’s latest snapshot of NR markets.

China led the trend – the closing price Ru1705 (the most heavily traded NR future on Shanghai Futures Exchange) reached Yuan18,420 in the end of November. It was 1/3 above of what was in the first trading week of November.

On TOCOM exchange in Japan, back-month prices for benchmark RSS3 materials appreciated by 28.2% to Yen228.1/kg in the trading weeks between 2 Nov and 30 Nov. At the same time, near-month reference price rose 27.0% to Yen221.0/kg.

Prices for RSS1 and RSS3 grades in Bangkok increased by 18.4% and 18.8% – to $207.65/100kg and $204.34/100kg – respectively between 4 Nov and 25 Nov. Over the same trading period, SMR-20 in Kuala Lumpur appreciated by 17.1% to $1174.05/100kg.

Notwithstanding, Dr. Prachaya Jumpasut, the voice of The Rubber Economist, believes the recent increases in rubber prices were mostly due to the appreciation in the US dollar, against Japanese Yen and Chinese Yuan. He claims that this was particularly the case during November “when the increase in rubber prices was combined with the speculative activities in the rubber futures market, particularly in Shanghai and TOCOM.”

Also, rubber market expert pointed out that with the Chinese Yuan added to the IMF’s SDR (special drawing rights) basket at the beginning of October by the IMF, “currency movements have become a very important and a more complex factor affecting rubber prices.” Jumpasut concludes that, on his opinion, the current nominal influences will not dominate the fundamental factor, i.e. oversupply of rubber.

Article source: European Rubber Journal