Spot prices of natural rubber have experienced a sharp fall of more than 2,000 yuan/metric tonne, or 15%, since May 2012, while the decline of natural rubber’s futures prices in Shanghai Futures Exchange reached as much as 19% during the same period.
But this is still not the end of the story, analysts noted, adding that the low tire operating rate might drag the rubber prices down further in the upcoming months.
-- Mounting inventory caps upside momentum of natural rubber
Investors’ nerves might have already been worn to shreds along with the ups and downs of the debt-burdened euro zone. Signs of global economic slowdown let them begin to worry about the health ofChina’s economy, the world’s second largest economy and largest rubber consumer.
Domestic rubber futures, like pricking up its ears, have been sharp in response to every cue from the outside markets, including the performance of crude oil on U.S. NYMEX and rubber futures on the Tokyo Commodity Exchange (TOCOM).
A rubber trader told Tireworld that the futures trading and spot trading of a commodity is usually inter-related, which makes the sluggish spot market of rubber quite normal under the current scenario of falling futures prices.
“But this is only part of the reasons,” said the trader. Supply/demand situation still constituted the primary cause of the current lackluster market performance, he added.
As of July 21, the total rubber inventory atChina’sQingdaobonded zone stayed as high as 228,000 tonnes, including 141,000 tonnes of standard rubber, 23,000 tonnes of complex rubber and 43,000 tonnes of synthetic rubber.
The rising inventory pressure has been a huge obstacle for rubber prices to edge up, analysts noted.
