Rubber market sentiment ‘uncertain’ amid supply concern, China weakness

Tokyo – Natural rubber (NR) futures pricing continued along the generally uncertain path seen over recent weeks on major Far East exchanges.

NR futures closed the trading week ended 12 April with mixed results amid active trading, Japan Exchange Group (JPX) reported.

In Osaka, Japan, OSE rubber futures closed 2.9% lower week-on-week, contrasting with Shanghai SHFE prices in China, which rose by nearly 1%.

China’s INE and Singapore’s Sicom TSR20 rubber also experienced “marginal changes”, according to JPX.

In its weekly NR futures review, JPX said rubber market sentiment remained “uncertain and mixed”, influenced by weather factors linked to El Nino and supply concerns, which are supporting prices.

Demand from major consumers in China, on the other hand, remains “uncertain and weak”, which according to JPX impacted market's sentiment.

In its report, JPX noted that a recent rally in commodity prices, including crude oil, gold, and cocoa, had prompted some funds to take long positions in rubber futures.

While it seems that many of these funds are still retaining their rubber positions, others have decided to realise profits, according to the Tokyo-based group.

In related news, China vehicle sales at the end of March saw a significant month-on-moth recovery, following a sharp decline in February due to the Lunar New Year holiday.

However, JPX noted that Chinese stock markets “continue to exhibit weakness, and the overall economic recovery remains fragile.”

Meanwhile, geopolitical tensions in the Middle East pushed to WTI crude oil prices to a peak of $87.67 per barrel.