Mixed trend in NR markets despite producers' meeting

London – Rubber markets were expected to bounce back after the Chinese New Year holiday (18-25 Feb), but a mixed trend was observed as TOCOM rubber futures hit an 11-month high on 2 March and Shanghai rubber futures declined.

TOCOM futures pricing reached Yen226.9/kg on 2 Mar, before easing back around 4 points two days later to day-session highs of just over Yen220/kg – for May and June deliveries.

Commenting on current pricing movements, analyst Dr Prachaya Jumpasut of the Rubber Economist, said that the natural rubber market was reaching stability.

“NR prices have recently been a lot steadier than during the second half of 2014 as the appreciation in the US dollar has started to wane,” said Jumpasut, while agreeing that there had been some uncertainty in the market.

Much of this uncertainty could be attributed to concerns over China’s growth as well as the failure to reach a major decision during the meeting of ASEAN rubber producers in Indonesia on 26 Feb.

The meeting attended by International Tripartite Rubber Council (ITRC) member countries, Thailand, Indonesia and Malaysia, as well as from Cambodia, Lao PDR and Myanmar, agreed to commit to “closer collaboration and cooperation” to strengthen natural rubber prices. The meeting, however, did not formulate specific and detailed efforts to support the price.

In India, Geofin commodity traders, reported zigzag moves on rubber futures on the NMCE (National Multi-Commodity Exchange).

Following an initial rise, the commodity came under pressure after there was no mention of changes in the import duty of natural rubber in India’s next annual budget.

According to Geofin, it had been widely anticipated that the import duty on natural rubber would increase from the current 20 percent to 30 percent.