Volatile NR markets see prices slip further

London - Natural rubber prices continued to fall during May, albeit the downward trend slowed compared to the sharp drops noted in April, ERJ’s latest analysis of the market shows.

Trading in Far East market was, last month, heavily influenced by volatile regional rubber futures markets as well as crude oil price and currency fluctuations – both the figures and industry officials suggest.

An ERJ snapshot showed on the Shanghai Futures Exchange, the closing price for RU1709 – the most heavily traded NR future – fell 12.5% since early May to close the trading week ended 7 June at Yuan12310/tonne. Since April, the market has registered a 25% fall, reaching an eight-month low.

Japan’s TOCOM exchange saw back-month prices for reference RSS3 materials fall by over 8% to Yen202.0/kg between 2-31 May, despite a slight pick-up in the first trading week of June.

In Bangkok, prices for RSS1 grades dropped by 7.3% to $213.05/100kg while RSS3 fell 7.4% to $209.70/100kg between 2-31 May.

In Kuala Lumpur, prices for SMR-20 fell by 7% to $148.85/100kg over the same trading period. Latex prices, meanwhile, rose 5,6% to $150.50 also as of 31 May.

According to the Malaysian Rubber Board, prices are expected to improve slightly in the near term due to current wet weather in southern Thailand and Malaysia that will affect NR supply.

The Association of Natural Rubber Producing Countries (ANRPC), last month, predicted a small shortage in supply for 2017.  NR production, it said, would reach 12.771 million tonnes while demand was set to reach 12.817 million tonnes.

The Malaysian Rubber Board, however, said the market is generally expected to be volatile due to “uncertainty” around crude oil prices, rubber futures markets, currencies fluctuations and economic development in major NR consuming countries.