Rubber futures record sharp fall amid spike in volumes

Tokyo – Rubber future markets closed the trading week ended 3 Sept sharply lower across all rubber exchanges, according to the latest report by the Tokyo-based JPX trading exchange.

In Osaka, OSE's new active February 2023 contracts ended about 4.6% below the prior-week’s closing level, at JPY216.6 amid “fresh speculative selling.”

“Prices continued to drift lower all week as overseas rubber prices sank to new lows,” noted JPX. Market sentiment, it added, “could remain bearish as there is little sign of recovery in the near term.”

In China, meanwhile, JPX reported week-on-week declines ranging between 2.2% and 3.4% for SCR/RSS futures traded on the SHFE/INE exchanges.

Meanwhile, SICOM rubber futures dropped to recent lows as speculators and opportunistic investors “continued to try lower prices… [amid] speculative and stop-loss selling by traders having long positions.”

At the same time, trading volumes “soared in all exchanges,” reported JPX, which linked the reactivated trading environment last week to declining prices.

Osaka’s OSE exchange typified the trend: trading in RSS3 futures volumes more than doubling during the week, while volumes increased 12% and 22% respectively on China’s SHFE/INE and Singapore’s SICOM exchanges.

Overall, JPX said market sentiment “remained bearish” amid continuing concerns of global recession, rising geo-political tensions and expectations of further interest rate hikes.

Furthermore, fears of a weakening Chinese economy, following a new city-wide lockdown in Chengdu, affecting 21 million people, impacted the market.

Traders were also concerned by weak Chinese manufacturing data for August and figures in Japan showing a 13% year-on-year drop in vehicle sales last month.