NR markets fall amid slowing Chinese economy, extended Shanghai lockdown

London – Far East natural rubber markets have seen a sharp decline over the five weeks to end of April, ahead of labour day holidays in the region.

Shanghai rubber futures for September delivery closed nearly 6% lower at Yuan12,915/tonne on 29 April amid concerns of slowing Chinese economy and the extended Covid lockdown in Shanghai and other major cities.

Singapore futures for July delivery were down 5% over the five-week period, while OSE rubber futures dropped 2.6%.

In its weekly rubber report 2 May, JPX said trading volume in all exchanges increased with both fresh speculative selling and position adjustments ahead of the golden week holidays in Japan and the Chinese labour day holidays.

According to JPX, Covid developments in China and the slowing economy were the key causes of declines in both global equities and commodity prices, including rubber futures.

In physical markets, Kottayam RSS4 and Kuala Lumpur SMR20 saw prices drop amid slow demand and a supply crunch.

Natural rubber supply, however, is expected to improve in the short-term as the region enters tapping season.

* Osaka Exchange was closed on Friday 29 April and figure reflects prices at close of day 28 April. Kottayam and Kuala Lumpur figures reflect prices for the week ending 27 April.