Rubber futures rally on reports of China ‘stockpiling’ plans

Tokyo – Natural rubber (NR) futures pricing has continued on an upward track for a fifth straight week as market sentiment remained positive for the commodity.

All major Far East markets closed the trading week ended 7 June higher compared to the previous week, “as consumers and Chinese players added fresh speculative long positions,” said Japan Exchange Group JPX.

In Osaka, Japan OSE rubber futures for November delivery surged by 4.7% week-on-week, reaching its highest level in seven years, according to the latest weekly JPX trading report.

In China, SHFE and INE futures saw gains of 2.5% and 2.6%, respectively, while Singapore’s SICOM climbed 2.6% week-on-week on “short covering”, to reach a three-year high.

Markets were driven by unconfirmed news of the Chinese government planning to buy 70 kilotonnes of NR for stockpiling, noted the report issued 10 June.

Furthermore, JPX noted some arbitrage buying, which was likely influenced by a sharp rally in synthetic rubber futures traded on the Shanghai exchange.

In other related news, Cote d'Ivoire was reported to have increased its rubber production in 2023 by 30% year-on-year to 1.7 million tonnes.

According to JPX, the African country has now overtaken Vietnam to become the third-largest NR producer, after Thailand and Indonesia.