Rubber futures “down sharply” on global economic woes

Tokyo - Natural rubber futures closed the trading week 11-15 July “sharply lower” across all major exchanges, Japan’s JPX has reported. 

The negative trend, said the exchange’s latest weekly report, reflected concerns that the global economy was “at risk of sinking into a recession.”

Rubber traders are particularly watching the Chinese economy, which could face economic slowdown linked to a recent surge in Covid variants and lockdowns. 

JPX noted “robust speculative and fresh selling” on China-based SHFE and INE markets last week, which fell 7% and 6%, respectively. 

China also reported sluggish second quarter GDP growth of +0.4%, well below market expectations of +1.2%. 

In Japan, meanwhile, rubber prices on the Osaka exchange slipped 2.5% amid generally quiet trading after the release of weak national economic data.

On Singapore’s SICOM exchange  rubber futures prices dipped 5% in active trading volume.

“The physical rubber futures market was tight, so the back-month contracts were almost trading in a flat forward curve,” JPX continued. 

On the other hand, it said, Malaysia's May rubber production slipped by 6.3% to 21,073 tonnes, which might have lent some support to the market. 

Elsewhere, the rubber trading report noted that the US consumer price index rose 9.1% in June, higher than market expectations. 

“This signalled the Fed's further rate hike at the next FOMC meeting, causing a rally in the US dollar, according to JPX.