LONDON—Far East natural rubber markets continued to decline in the two weeks to Sept. 24, despite showing signs of recovery for a short period in mid-September.
Rubber futures in Osaka, Shanghai and Singapore all reported minor declines compared to the two weeks before, as did the SMR20 on the Kuala Lumpur Stock Exchange.
In India, Kottayam RSS4 posted the biggest decline at 4.5 percent, as rubber production levels neared a peak.
During the two-week period, NR prices did see a slight rebound both in the physical and futures markets, due mainly to reports of strong economic recovery globally and a temporary decline in COVID-19 cases.
The markets started a downtrend by Sept. 20, as supply continued strong with the tapping season in full swing.
The rising number of COVID cases in recent weeks as well as the increasing chip shortage affecting the automotive industry lowered market sentiment.
NR producing countries have been expecting to see a sharp price increase in prices as the market awaits a large-scale import from the world's biggest NR consumer China.
In its latest market intelligence update Sept. 3, the Association of Natural Rubber Producing Countries (ANRPC) cited media reports suggesting the NR inventory is depleting in China as manufacturers opted to source their rubber locally to avoid high shipping costs.
"The total inventory has reportedly dropped by 190,000 (metric) tons between the beginning of June and end of August," the report said.
As Chinese manufacturers and traders try to replenish the inventory ahead of the offseason, physical markets in Southeast Asia can expect imminent large-scale imports from the country either in September, or in October, ANRPC said.