Shanghai retreat dents rubber price recovery

A decline in forward market sentiment among Chinese buyers seems to have stymied hopes of a sustained recovery in natural rubber prices.

On the Shanghai Futures Exchanges, contracts for September delivery had lost almost Yuan400/tonne in the past week to reach Yuan14,275/tonne as of 9 June.

A snapshot on 9 June showed a continuation of the negative trend in rubber futures prices for the following three months: prices for October, November and December fell by Yuan40, Yuan 30 and Yuan180 respectively on the day.

The Chinese retreat will likely have dented optimism about natural rubber prices, which were trending mainly upwards this month – building on sizeable gains made in May.

On the Malaysia Rubber Exchange (MRE), for example, prices for SMR20 at the start of June were averaging Sen590.50/kg – (1-3 June). This marked a continuation of momentum from the previous month, when prices rose steadily to reach Sen579.00/kg.

The May average price for SMR20 on the Malaysian exchange came in at Sen540.50/kg – prices having started the month at Sen521.50/kg.

As of 3 June on the Tokyo Commodity Exchange (Tocom), meanwhile, NR settlement prices for the ‘nearby month’ were Yen229.0/kg and Yen241.1/kg for the ‘back month’ (November 2015).

At the end of May ‘nearby month’ prices had reached Yen229.5 (29 May), While ‘back month’ settle prices were Yen241.2/kg.

This marked a significant improvement on April, when ‘nearby month’ prices finished at 213.7/kg (30 April), with ‘back month’ prices at Yen218.6/kg.