An oversold market situation still depressed rubber futures in Asia during the week as investors were worried about a slowdown in Chinese economy and a glut of natural rubber (NR) supply this year as estimated by the Rubber Economist recently which had further dampened investor confidence and market sentiment.
In this regard, the Rubber Economist will have to take responsibility if the estimation is incorrect especially with regard to the surplus of NR supply by the end of the year.
Looking at some fundamental figures, the General Administration of Customs of China reported that NR imports to China increased from 630,941 tons in the first quarter of last year to 804,636 tons in the first quarter of this year, or up 27.53%.
At the same time, the ANRPC reported that NR production in Thailand, Indonesia, andMalaysia increased from 1.94 million tons in the first quarter of last year to 2.06 million tons in the first quarter of this year, or up 6.19% only. In addition, rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.5% on Friday from an earlier Friday, according to the Exchange.
At the moment, rubber market fundamentals still lend some support to the current rubber movements.
It is too early to forecast as NR supply in major producing countries like Thailand, Indonesia, and Malaysia remain tight amid the dry wintering season.
Investors were concerned about the slower Chinese economy. However, producers were unwilling to sell at such low levels amid the low production season.
Source: IRCo
