Rubber markets fall on lower demand in China

LONDON—Rubber markets have continued to recover from a sharp decline in mid-July, but remain weaker compared to earlier in the summer or the highs of early March.

Despite the recent gains in early August, all rubber markets monitored by European Rubber Journal continued to fall over the five weeks to Aug. 12.

The decline in price trends, particularly in Shanghai futures, has been linked to concerns over demand in China and developments within global economy, including the influence of crude oil price movements.

Also influencing the market were the rising uncertainties caused by interest rate hikes globally, and NR supply woes, according to the latest monthly report by the Association of Natural Rubber Producing Countries.

Shanghai contracts for September delivery closed 5-percent lower compared to July 8, as active contract month switched to Jan. 23 from Sept. 22 with the position transfer of leading traders.

Osaka rubber futures slipped 7.6 percent compared to the five weeks before, hitting the lowest so far this year.

Physical rubber markets also declined, as supply eased, and demand remained tepid amid China lockdowns and global economic woes.

In its Aug. 16 report, the ANRPC said it is anticipating a "better-than-expected" recovery in the NR market in the near future, as the Chinese economy has picked up following a COVID-19-related slump.

"The (Chinese) government has introduced various measures including central bank cuts (in) interest rates to stimulate the economic recovery from lockdowns and worsening of (the) real estate crisis," it added.