KUALA LUMPUR—Natural rubber prices showed a mixed picture during the first half of March, as external factors dominated trends at Shanghai futures.
Over the first two weeks of March, rubber futures traded at the Shanghai Exchange lost 4.7 percent while the RSS3 contracts traded at the Osaka Exchange gained 2.2 percent, according to a recent market intelligence report by the Association of Natural Rubber Producing Countries.
In the physical markets, RSS3 lost 0.3 percent during the first half of March while STR20 gained 3.9 percent at Bangkok during the same period, according to the March 22 report.
In sharp deviation from the usual trend, key physical markets as well as SICOM and Osaka Exchanges did not track the Shanghai rubber futures during the first half of March.
This, according to ANRPC, was mainly due to the fact that the Shanghai Exchange has been driven by factors external to the rubber sector since the end of February.
"The market sentiment has been dominated by concerns over potential heating up of inflation and the likelihood of a policy shift toward higher interest rates (in China)," the report said.
In addition, China's producer prices rose at the fastest pace in more than two years in February, adding further to the global inflation worries.
"Official data showed that the Chinese producer price index in February rose 1.7 percent from a year earlier, faster than the 1.5 percent anticipated by economists and up from the 0.3 percent rate posted in January," the ANRPC added.