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Asian rubber prices soar on supply woes, COVID glove shortage and China tyre demand

Rubber prices have rocketed to their highest in over three years as protective glove demand surges due to the COVID-19 crisis and industrial use rebounds in China, while supplies remain tight with producers struggling to replenish stocks.

Output across Southeast Asia - which accounts for more than two-thirds of natural rubber supplies - has been hit by coronavirus-related labour shortages as well as floods and unfavourable weather in Thailand and Vietnam.

Recent data has underscored the depth of the supply-demand gap that traders now worry could be exacerbated by unrest in key producer Thailand.

“Speculation that escalating confrontation between the authorities and anti-government protesters in Thailand may cause supply disruptions have also fuelled concerns over tighter supply,” said Shinichi Kato, president of rubber material dealer Shinichi Kato Office.

Rubber futures on Japan’s Osaka Exchange hit their highest levels since February 2017 on Thursday, having jumped more than 40% since late September.

The most-active rubber contract on the Shanghai futures exchange is also at three-year highs and up 26% for the year to date. Markets in Singapore and Thailand have also seen steep rallies.