Rubber markets hit by weak global economy

London – Far East natural rubber (NR) markets witnessed sharp declines in recent weeks amid fears of global economic slowdown and despite supply tightness during wintering season.

The final weeks of February and early March saw a positive development in pricing, as the rainy season suggested there was no longer any large physical surplus in the short term.

ERJ's analysis, however, shows that nose-dived in the trading week ended 10 March, as concerns about China’s economic recovery led to a ‘bearish turn’ in market sentiment.

Later in the month, the banking turmoil in the US increased fears of a global recession, clouding commodities prices.

In Shanghai, for instance, the most heavily traded rubber futures, for May delivery, closed at Yuan11,720/tonne during the week ended 24 March, over 6% lower than 17 Feb - nearly five weeks before.

In Japan Osaka RSS3 NR futures were down, tracking Shanghai trends.

While India’s Kottayam physical market remained flat, prices of SMR20 and latex in Kuala Lumpur were down by over 5%.