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Wednesday, May 25, 2022

Natural rubber still weak, cartel mooted

London – Natural rubber prices remained weak in the month of April, ERJ’s latest snapshot of the main Far East markets has revealed.

Natural rubber still weak, cartel mootedDespite a rise in crude oil prices, and the consequent pressure on synthetic rubber prices, NR prices showed little sign of strengthening last month as wintering season came to an end in south east Asia.

On the Shanghai Futures Exchange, spot prices for RU1805 – the most heavily traded NR future – stood at Yuan11,260 on the week ending 4 May, almost on a par with levels noted on 30 March.

In Tokyo, meanwhile, TOCOM back-month prices for RSS3 materials closed at ¥192.0/kg on 2 May, 6.6% up compared to its closing price on 28 March.

In Bangkok, government efforts to step up regional rubber activities in the shape of a new cartel consisting of Indonesia, Malaysia, Vietnam and Thailand, are yet to pay off.

Spot prices for RSS1 grades in Bangkok showed a 3.2% increase at $179.20/100kg on 4 May, compared to levels on 29 March.

Tracking a similar trend, RSS3 prices rose 3.3% at $175.60/100kg on 4 May, compared to the price recorded at the end of March.

In Kuala Lumpur, prices for SMR20 were up nearly 4% month-on-month at $143.85/100kg on 4 May.

With a 7.7% increase, latex spot prices in KL stood at $122.55/100kg on 4 May, compared to $113.75/100kg on 30 March.

According to Thai press, Thailand’s ministry of agriculture and cooperatives (MOAC) is in discussion with Indonesia, Malaysia and Vietnam to establish major natural rubber pricing board equivalent to OPEC.

The Thai embassy in the US reported that a committee, comprising of government representatives and rubber planters is set to be formed to determine the domestic price of natural rubber. A final decision is due in three months.

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