Natural rubber futures show continued weakness

Tokyo – Natural rubber futures pricing continued on a negative track last week despite an uptick in Japan, the Japan Stock Exchange (JPX) has reported.

Over the trading week to 18 Aug, Osaka OSE futures for December delivery increased by 1.1% week-on-week on “speculative buying and a weakened yen.”

The NR pricing gains were accompanied by a new high of the open interest of 19,659 contracts, added JPX in its latest weekly NR  trading review. 

By contrast, " renewed selling pressure" led NR futures pricing on China’s SHFE and INE exchanges to fall by 1.4% and 1.1% week-on-week, respectively. 

On Singapore’s SICOM exchange, meanwhile, rubber futures for February delivery ended trading 2.1% below the level of the previous trading week. 

While JPX went on to suggest that the decline in NR futures prices could be 'bottoming out', concerns remain about the direction of the Chinese economy. 

According to the exchange, China’s weakening economic picture and ‘property market turmoil’ continue to weigh on trading sentiment. 

Among recent negative factors was a decline in vehicle sales recorded in China for July – further weakening prospects for a recovery in rubber demand. 

On the overall outlook, JPX commented: “Weak demand and low prices could lead rubber producers to consider reducing production.” 

This could “eventually contribute to altering the ongoing downward pricing trends in the long term,” the report concluded. 

Selected NR futures price trends on major trading exchanges