Natural Rubber Report F/H of DEC 2019

At the end of this week Friday rose at TOCOM and on ICEX while in Thailand and Malaysia rubber prices fell.

The price of natural rubber in May at TOCOM rose 0.3% to 193.9 yen per kg.

Price of RSS- In Thailand fell 45 cents to $ 161.20 per 100 kg according to the Rubber Board. Rubber prices in Malaysia SMR-20 rose 95 cents to $ 144.20 per 100 kg.

Rubber prices on the Indian Commodity Exchange ended up as they followed the Tokyo Commodity Exchange rise. Rubber prices on ICEX rose 0.2% to 13,350 rupees per 100 kg.

Rubber prices this week fell from the highest price of five months last week.

Rubber prices on TOCOM on Thursday 5 December rose 5% to five-month highs, as a rise in the Shanghai market prompted new purchases as US and Chinese negotiations improved after US President Donald Trump’s speech.

Rubber prices on TOCOM on Thursday 5 December had risen to 198.3 yen prices, the highest since June 24. The increase is the biggest one-day increase since June 2017.

The factors driving the rise in rubber prices are as follows:

The Association of Natural Rubber Producer Countries said global natural rubber production from January to July fell 7.3% this year to 7.04 million tons.

The price of natural rubber in TOCOM is expected to rise as Thai, Indonesian and Malaysian production falls due to a fungus outbreak attacking the plantation area. Production in the three countries is 70% of the world’s natural rubber.

Chinese natural rubber imports increased based on data released by the General Administration of Custom on December 8, showing Chinese imports of natural and synthetic rubber including latex in November amounted to 636,000 tons, a 27.2% increase from 500,000 tons in October and yet still fell 5.6% from 664,000 tons in the same period last year.

From January to November Chinese imports of natural rubber and synthetic rubber, including latex, amounted to 5,848,000 tons, a 7.8% decline from last year in the same period.

Global demand for natural rubber reached 14 million tons last year, with 92% of this amount produced by 6 million farmers in Southeast Asia and Africa.

According to news from the Thai government on Wednesday, the Thai Cabinet has approved a 20-year plan in which the country will reduce the area of ​​rubber plantations by 21% in order to double exports.

Factors that caused rubber prices to fall this week:

The increase in rubber prices this week stopped because demand for rubber from China was reduced due to slowing sales of cars in China. The Association of Motor Vehicle Manufacturers in China said that sales declined 4% in November.

Crude oil prices fell after US industry data came out and data from large oil inventories while expected to strengthen demand next year caused crude oil prices to fall.

A weaker dollar makes the price cheaper when bought by countries using the US dollar. The yen dollar rate was 109.44 yen compared to 109.47 yen the previous day on Thursday.

Rubber prices continued to improve at the end of this year, due to declining production, and estimates that next year prices will still increase again. The movement of crude oil prices will greatly affect the price of rubber, because synthetic rubber is a competing product for natural rubber, one of the ingredients for making it from crude oil.