The present slight breather in global NR market is, of course, a welcome relief though it can in no way be considered as the beginning of a boom. All indications are that the market will be balanced in the medium term and price volatility may continue till the turn of the decade when prices are likely to surge thanks to healthy market fundamentals.
Natural rubber market is currently going through an unpredictable phase with fundamentals being overtaken by a host of external factors in influencing the price. The global natural rubber (NR) prices spurted during August, influenced by external factors. The Korean crisis and the rise in crude oil prices pushed up NR market while higher Chinese demand also played a part in raising international price.
“Apart from the market fundamentals in NR, physical NR prices were also influenced by other external factors such as development in the oil industry, inventories in regional futures markets, strength in currency and other global events such as nuclear threat by North Korea,” says Association of NR Producing Countries (ANRPC).
The Singapore-based International Rubber Study Group (IRSG) also endorses the influence of external factors in NR price movements. “Natural rubber prices saw signs of strengthening through July, but continuing uncertainty in the rebalancing of the oil market caused price swings to continue in commodities market in general in Q3. Despite inventory draw-down and continuing automobile growth in China, market sentiments on soft rubber consumption, signalling a cool down in China’s automotive growth, supported the bearish trends in NR prices through Q3,” says the latest IRSG News Letter.
Indications of consolidation
The current natural rubber price is not reflective of the economic fundamentals, observes the International Tripartite Rubber Council (ITRC) and International Rubber Consortium (IRCo).
This story is from the September - October 2017 edition of Rubber Asia.
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This story is from the September - October 2017 edition of Rubber Asia.
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