Rubber prices up 27% from August low

International prices for natural rubber have climbed to a six-month high, with benchmark futures prices on the Tokyo Commodity Exchange up 27% from the recent low in late August.

The exchange's contract for RSS3 rubber sheets for April 2017 delivery closed at 189.8 yen per kilogram on Tuesday, up 1.4% from the day before.Synthetic rubber spot prices have been on an upward trend since August due to rising prices for the raw material butadiene. This has helped push up the price of natural rubber, which is used in many of the same applications. On China's Shanghai market, there has been an influx of speculative money to commodity futures as a whole. The natural rubber market has risen sharply, giving market participants a sense of security when buying.

China, the world's largest consumer of rubber, is experiencing strong new car sales in the wake of cuts in vehicle taxes. Tire-use rubber demand is increasing as well. The various producing regions of Southeast Asia are also said to be refraining from discounting shipments to help support prices.

Southern Thailand -- a major producing region -- experiences reduced output in the April-June period. The anticipated product shortage during this time is another factor behind the rise in Tokyo Commodity Exchange futures prices.