Natural rubber futures surge on China economic prospects, supply issues

Tokyo – Natural rubber (NR) futures surged across all major Far East markets during the trading week ended 13 Oct, according to Japan Stock Exchange (JPX).

The hike was mainly driven by buying from funds and speculative traders, amid growing belief that China's economy "might be on the brink of recovery,” JPX said 16 Oct.

Furthermore, heavy rains in producing countries pushed physical rubber prices higher, leading to fund managers "rushing to buy rubber futures," added the weekly review.

Overall, said JPX, these developments led to a “big rally” on local and international exchanges, with the March 2024 OSE rubber futures in Osaka, Japan rising 11% week-on-week.

Also, OSE 'front contracts' for October delivery soared 25% “as sellers struggled to buy back to close their positions due to scarce market liquidity and difficulties in preparing physical rubber.”

In Singapore, SICOM’s active January 2024 contracts rose 6.9%, with “notably high” weekly trading volumes, continued JPX.

On China's SHFE and INE exchanges, rubber futures prices rose 5.9% and 7.4%, respectively compared to the week ended 29 Sept, before the country went on a week-long holiday.

Selected NR futures price trends on major trading exchanges