Rubber prices weaken amid concerns over China, gloves market

London – Rubber prices in most of the major Far East markets monitored by ERJ fell during the two weeks to 8 July, amid an oversupply situation within the gloves sector and declining commodity prices.

Rubber futures closed lower in all major rubber exchanges on 8 July, with Shanghai contracts for September delivery closing just under 1% lower compared to the two weeks before.

Osaka rubber futures slipped 2.4% compared to two weeks before, due mainly to strong selling from the plunge in the Chinese market.

According to the latest weekly rubber report by the Osaka Stock Exchange, China’s news of further Covid restrictions and mass testing in some cities harmed the rubber market.

A stronger US dollar arising from the battle against inflation and fear of recession also put pressure on commodity prices, where copper, grains, and crude oil prices fell sharply.

Kuala Lumpur latex recorded a 9.5% fall during the analysis period, piling pressure on gloves makers' share prices, which have nose-dived over recent months.

The decline follows a 9% drop recorded in the two-week to 24 June, with Top Glove saying it was to reduce production in anticipation of average selling price falling below pre-Covid levels.