According to report by the European Rubber Journal, the prices for natural rubber are going further away from a recovery. These recent market trends have been strongly influenced by the most heavily traded future RU1609 on the Shanghai Futures Exchange falling by 5.6 percent to Yuan 10,845/ton between 1-29 July. Over the same period another heavily traded future RU1701 has reportedly also fallen by 12.5 percent to Yuan 12,220/ton.   On the Tokyo Tocom exchange a small recovery has been observed in the RSS3 prices, which have risen from Yen 154.3/kg on 6 July to almost Yen 160.0/kg by the end of July. However, at the beginning of August they have fallen back to Yen 153.0/kg. In Bangkok a more positive trend has been observed of the prices for RSS1 and RSS3, where each has increased by approximately 4 percent to $178.85/100kg and $182.95/100kg respectively within July. However, by 5 August both went down respectively to $176.70/100kg and $173.40/100kg.

Also in Kuala Lumpur between 1-29 July the prices for SMR have fallen by almost 2 percent to $127.30/100kg between 1-29 July – recovering slightly to $130.70 by 5 Aug.

According to ERJ, these latest declines in prices have led to the pact between the three main rubber producing countries to revive natural rubber prices by limiting supply under increasing scrutiny. Under that deal, Thailand, Indonesia, and Malaysia have agreed to cut rubber exports by 615 kilotons over the six months to August. However, some analysts have reported that Thai rubber exports to China had increased significantly in recent weeks, while Chinese imports of product from Malaysia and Indonesia had fallen slightly. The remaining months of 2016 could, therefore, provide a severe test of suppliers’ resolution, and their willingness to take further measures to rebalance the market.

Article source: European Rubber Journal