Typhoon triggered defaults nudged spot prices up 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1935/mt FOB Bangkok Laem Chabang, up US$25
• Helixtap assessed SIR20 US$1805/mt FOB Belawan Surabaya, up US$20
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2010/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1990/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Physical rubber prices gained strength during the Asian trade day as a typhoon in Vietnam disrupted the supply chain, limiting supply in the market. In addition, increased inquiries from the Chinese tire makers for the prompt cargoes resulted in further support for the prices. 

Weather disruption continues to weigh on supply 

There were reports of defaults in Vietnam, resulting in some supply shortages in the market. According to Helixtap market intelligence, the default volume amounts to around 450,000 tons of shipments. 

Various sources noted that this was the impact of the Typhoon in Vietnam. There were reports of landslides and floods triggered by Typhoon Yagi, and the National Centre for Hydro-Meteorological Forecasting noted that the aftereffects are likely to linger for some more time. 

Despite Vietnam's status as a minor rubber producer, the impact of any supply disruption intensifies in a market already experiencing some shortages due to heavy rains in Thailand. According to a producer source, the impact becomes more significant when the majority of Vietnamese rubber is exported to China. Thus, he added, the "price to default is huge."

Meanwhile, reports indicated that Vietnamese RSS prices ranged from US$2100-US$2160/mt on a FOB basis, while SVR 10 offers surged to US$1860/mt on the same basis. According to a trader source, "Super typhoon Yagi has given the Vietnamese ample reason to put a rocket to prices."

Chinese tire makers back to cover 

As a result of the defaults, there was some uptick in buying interest from Chinese tiremakers. While Chinese buyers have been actively buying over the past few weeks, the buying was largely restricted to arbitrage buyers or traders. Market sources, however, noted that there were inquiries from Chinese tire makers during the day looking for prompt shipments.

On a CIF basis, the offers for the STR 20 mixture ranged between US$1890-US$1925/mt. However, a trader source noted that there was a wide gap between bid and offer. Moreover, the buyers were keen on booking from Chinese traders rather than looking for shipments in the international market. 

Even though imports of Vietnamese rubber into China dropped by 27% in July compared to July last year, there has been more than a 200% rise in trade flow since May 2024. 

Thailand and Indonesian production are also under duress

In Thailand, the Meteorological Department of Thailand (TMD) has issued warnings regarding the likelihood of flash floods. There has been some slowdown in the surge in Thai raw material prices, but with rain forecasts, the supply might tighten further. Some buyer sources noted that there were some very high offers for STR 20 during the day, which kept them on the sidelines. 

The situation was somewhat similar in Indonesia, as rains and wintering continued to impact the supply. Factorygate cup lump prices reached around IDR 27,000 during the day, seeing a jump of around IDR 500-IDR 800 compared to September 6. 

A trader source noted that Indonesian RSS 1 offers were now around US$2430-US$2440/mt, whereas the sellers opted not to offer SIR 20 during the day. 

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Weakness in US dollar brought Chinese buying back

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1910/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1785/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1760/mt CFR Hamburg Rotterdam, up US$ 30
• Helixtap implied AFR10 US$1720/mt FOB Abidjan, up US$ 30

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 26,600/kg ex-works, up IDR 500
• Helixtap assessed Thai raw material THB 57/kg ex-works, up THB 0.5
• Helixtap assessed Bulk latex US$1540/mt FOB Bangkok Laem Chabang, down US$10

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1810/mt FOB Ho chi minh, down US$20
• Helixtap assessed SMR20 US$1900/mt FOB Klang Penang, down US$30
• Helixtap assessed TSR 20 US$1850/mt CIF China, down US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan

Market sentiment was “Neutral” - Helixtap sentiment tracker 

An uptick in Chinese buying, coupled with weakness in the US dollar, kept market sentiment buoyant during the Asian trade day. However, international buyers continued to stay on the sidelines amid the ongoing volatility. 

Fickle Chinese buying confuses the market 

After some slowdowns following reports of stock rotation in China, there was some uptick in Chinese buying during the day. Market sources reported a lack of genuine demand support. The majority of inquiries came from arbitrage buyers or traders.

In contrast to the offers for the STR 20 mixture, which were in the range of US$1885-US$1895/mt on a CIF basis, the traded level was approximately US$1840-US$1850/mt. Chinese traders are optimistic about the future of the rubber market, which, according to sources, has been the primary factor driving consistent buying.

The bullishness is largely based on the raw material shortage seen in the international market due to unprecedented heavy rains in Thailand and winter in parts of Indonesia. There were reports of some uptick in tire production. According to industry experts, the tire industry is undergoing a significant transition leading to a redistribution of market share, moving away from major manufacturers and toward tire producers located in Asia. In the second quarter of this year, Chinese tire exports saw a 4% rise compared to the corresponding period last year. 

It is not that the Chinese market is experiencing a massive decline in inventory levels. As per Helixtap market intelligence, the Chinese market has around 1.3 million tons of rubber stock. While there were some dips in the TSR 20 and TSR mixture cargoes, as per the market sources. However, a Singapore-based source noted that he has not seen them replenishing that yet. In addition, the volatility in the forex is also impacting the buying as they expect the weakness in the US dollar to continue amid expectation of Fed rate cuts this month. 

Volume flow into China improved in July

According to customs data, there has been a significant increase in volume flow into China, particularly from Indonesia, due to lower SIR 20 prices. Compared to January levels, Chinese imports of Indonesian rubber have increased by around 82%. 

There has also been an increase in imports from Thailand. Even though the import volume in July was lower than the highest of the year in February, there was a 42% rise in imports in July compared to January. 

The uptick in raw material prices has slowed, but they are still on the higher end

Meanwhile, the surge in Thai raw material prices, particularly RSS prices, has slowed down this week. There are reports of scattered rains still impacting the tapping activities, which capped a significant correction in the prices. In addition to some correction in Indian domestic prices, it is likely the bid level of the Indian buyers would see some correction weighing upon the international levels as well. 

Slight uptick in spot with support from raw materials 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1900/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1775/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1730/mt CFR Hamburg Rotterdam, steady
• Helixtap implied AFR10 US$1690/mt FOB Abidjan, steady 

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1980/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1940/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

There was some optimism in the physical market, largely driven by the northbound raw material prices. With the overall demand continuing to be sluggish, Chinese buying slows down as the buyers await the stock disposal. 

Spot driven by raw material prices 

The market saw limited activity as some buyers opted to stay on the sidelines amid the ongoing market volatility. While the prices saw a steep upward trend last week, they saw some support during the day this week following a significant correction.

The trigger for the market has been limited supply for raw materials and an associated hike in the prices. Some Indonesian producer sources noted that the supply has tightened due to the ongoing wintering in Indonesia.

According to an Indonesian producer source, prices did not see any correction over the past three days, largely due to limited supplies. Indonesian cup lump prices were reportedly in the range of IDR 26,200-IDR 26,500/kg ex-works. 

The shortage of raw materials, along with some optimism in European macro indicators, supported the prices during the day. Furthermore, the US dollar's weakness has also been a key factor in some price recovery. Trades for SIR 20 were reported in the range of US$1765-US$1775/mt on a FOB basis, slightly higher than the previous day.

Furthermore, reports of rain and thunderstorms in Thailand have kept the country's supply tight. Producer sources noted that prices for field latex have been holding firm, and the ripple effect was seen in the TSR market as well. 

In terms of margin, Thai producers appear to be in a more secure position than their Indonesian counterparts. According to Helixtap data, the spread between cup lump and TSR 20, which was in the range of US$240-US$260/mt in early January for Indonesia and Thailand, has seen some drastic change. 

As of September 5 market levels, the spread between Thai cup lump and STR 20 is around US$180/mt, and for Indonesian rubber, the spread is around US$85/mt, which is significantly lower than January levels. 

China slowing down 

Meanwhile, market activities slowed down in China during the day, with sources noting limited buying interest and a widening bid and offer gap. While there was some buying interest, the frenzy seen last week has calmed down. On a CIF basis, there were offers for STR 20 mixture in the range of US$1875-US$1895/mt, but the buying interest was around US$1800-US$1810/mt.

China's economy continues to struggle despite multiple attempts to stimulate growth, including measures aimed at addressing the challenges in its property market.

Meanwhile, some optimism from Europe lent some support to the market sentiment amid stronger German industrial orders data and the eurozone retail sales figures. Furthermore, the speculation surrounding the Federal Reserve's move to potentially initiate its anticipated cycle of interest rate cuts weighed on the US dollar, but kept the rubber market upbeat on some recovery in demand.

Jitters around Chinese stock rotation weighs on spot; Raw material prices continue to surge

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1880/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1760/mt FOB Belawan Surabaya, down US$10
• Helixtap assessed AFR10 US$1730/mt CFR Hamburg Rotterdam, down US$10
• Helixtap implied AFR10 US$1690/mt FOB Abidjan, down US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1965/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1940/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The anticipation around the Chinese stock rotation kept the market sentiment bearish, weighing upon the spot prices during the Asian trade day. Meanwhile, reports of worsening weather conditions in Thailand and wintering in Indonesia resulted in firm raw material prices. 

Jitters amid market participants around China’s stock rotation

Confirmed reports of China selling off its older rubber stock to the market heightened the anticipation of a further downtrend in prices during the day. According to market sources, rumors of around 100,000 mt of older rubber stock are due to be sold off into the market around mid-September. 

Even though there was no confirmation on the volume to be liquidated, there was a significant slowdown in market activities. The offer levels persisted in their correction, with trades for SIR 20 reported in the range of US$1755-US$1765/mt on a FOB basis.

Market participants found there was little buying interest and deemed the market weak. Given that the sell-off is scheduled for mid-September, it is likely that prices will remain soft for the first half of the month.

On a FOB basis, there was some correction in the offer level for STR 20 to around US$1900-US$1905/mt. However, the market expects that the price decline will be short-lived.

The recent increase in Chinese domestic and international raw material prices resulted in a hike in spot levels. In addition, according to industry reports, there is an increase in downstream tire production. Thus, the market believes that in the short term, the prices might witness some correction but would continue to exhibit strength given the supply condition.

"Futures may be weakening, but I do not see a connected weakening on physical levels." There are some discounts available on some specific grades (where sellers may have built old stocks), but generally, physicals are pretty firm,” said a Thailand-based source.

Raw material prices firming up

On the other hand, raw material prices continued to trend upward in both Thailand and Indonesia. While there are forecasts of further heavy rains in Thailand, Indonesia is currently experiencing wintering.

A Thailand-based source noted that there are predictions about weather disturbances either already here or fast approaching. Some Thai producers believe that this year, overall rubber production from Thailand would be around 10-15% lower than 2023.

According to some sources, there is a significant demand for Thai RSS and latex, as the available volumes at Thai auctions are booked quickly. “One wouldn't say that there is any evident struggle to move volumes—definitely not for RSS, not for Latex and Skim,” the Thailand-based source said, adding the selling pressure is more at the processed rubber segment.

Indonesia is also seeing some support for raw material prices due to wintering. Some Indonesian producer sources noted that the supply for cup lump is limited in the market, which weighs on the margins amid weakness in demand for TSR. 

According to Helixtap farmer’s data, Indonesian farmgate cup lump prices saw a 17% rise as of September 4, compared to early January levels. 

Market slumped on talks of Chinese stockpile rotation 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1890/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1770/mt FOB Belawan Surabaya, down US$5
• Helixtap assessed AFR10 US$1740/mt CFR Hamburg Rotterdam, down US$20
• Helixtap implied AFR10 US$1700/mt FOB Abidjan, down US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1975/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1950/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The spot rubber market witnessed a decline in the price level during the Asian trade day as talks of Chinese stockpile rotation made rounds in the market. Across the board, the correction kept some sellers on the sidelines. Meanwhile, some Thai producers chose to maintain their offers despite a correction in raw material prices.

China set to flush the market 

Talks of China rotating its stockpile impacted the overall market sentiment, weighing on the pricing level. According to Helixtap market intelligence, the volume of stock to rotated is yet unclear. However, some sources noted that they would be selling off the older stock.

Despite the expectation of official news on August 4, the discussions surrounding it have eroded market confidence. The government will sell a lot of stockpiles back into the market, which is causing prices to go lower, said a Singapore-based source. 

In late June and early July this year, the Chinese government bought over 50,000 mt of rubber for restocking, resulting in some initial uptick followed by some stalling of the physical rubber prices despite the onset of the new season. This led to concerns among some market participants about the potential severity of the impact on prices.

Meanwhile, some sources believe that the sell-off could represent the liquidation of some non-EUDR complainant rubber. However, Helixtap was unable to confirm this information.

Price pressure for the short term 

The impact directly affected the prices, which are likely to endure pressure for a brief period before recovering. There was a significant drop in the African rubber prices during the day, which according to some sources was an attempt to move more volume before the prices drop further. The traded level for AFR 10 was approximately US$1730-US$1735/mt on a CIF basis for China. The offers to the European market also dropped to US $1750-US$1770/mt on a CIF basis. 

There were also some trades for SIR 20, with the traded level around US$1765-US$1770/mt on a FOB basis. However, there was some hesitation among the Indonesian producers to lower their offers further, as they are currently either selling at cost or close to it. A trader source observed that sellers were making limited offers, as their prices were now nearly at cost. The physical market is slipping, and there is too much pressure from the paper markets, according to a producer source. 

STR trying to hold steady 

Meanwhile, the offers for STR 20 for the international market held steady throughout the day, despite some changes in raw material prices. According to a Thailand-based source, Thai RSS prices also saw some correction, which has been the key price driver in the recent week. 

On a FOB basis, the offers for STR 20 were between US$1910 and US$1920/mt. Some trades for STR 20 mixture were reported around US$1815-US$1820/mt on a CIF basis.

Spot corrects as buyers fall back; China moves to warehouse buying   

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1900/mt FOB Bangkok Laem Chabang, down US$20
• Helixtap assessed SIR20 US$1775/mt FOB Belawan Surabaya, down US$35
• Helixtap assessed AFR10 US$1760/mt CFR Hamburg Rotterdam, down US$20
• Helixtap implied AFR10 US$1720/mt FOB Abidjan, down US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1980/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The physical rubber market experienced a soft start to the week due to a technical correction during the Asian trade day. Meanwhile, there was a slight slowdown in China as buyers shifted their purchases to domestic warehouses amid continued healthy inventory levels.

SIR witnesses the sharpest drop 

While there were corrections across the board, SIR 20 saw the steepest decline. Indonesian processed rubber has been struggling to find interest lately, putting prices under pressure. Market sources reported that SIR 20 traded at around US$1775-US$1780/mt on a FOB basis, marking the steepest intraday drop since early June.

The major Indonesian rubber buyers were sidelined today. As a result, some market participants believe these volumes might be desperate sales in an effort to keep the volume moving. With reports of early wintering in Indonesia, the raw material prices have been on a rise, which is likely to weigh on the margin. “I think everyone is waiting today,” said an Indonesian producer source, given the market lost the momentum it gathered last week. 

Other Asian grades, despite the correction, continued to maintain their premium over SIR 20. On a FOB basis, the SVR 20 offers were around US$1830-US$1840/mt, and the STR 20 offers were around US$1910-US$1920/mt.

Higher raw material costs boosted Thailand's prices. According to Helixtap market intelligence, it ranged between THB 56.5 and THB 59/kg, depending on the volume. The overall buying interest was limited. 

A Thailand-based source noted that Thai Bhat has weakened for the first time in the past two months, resulting in some price easing. “The prices have climbed up too much too fast,” he added. However, if the heavy rains continue, along with the rising interest among the sellers to push volume for the EUDR market, the price levels are likely to remain elevated.

The Chinese slowdown also impacted the sentiment

China also slowed down during the day. There was still some buying interest, with trades for STR 20 mixture reported in the range of US$1845-US$1860/mt on CIF basis, against the offer level of US$1880-US$1890/mt on CIF basis. 

Some market sources attributed the market's weakness to a slowdown in China. In addition, the bearish economic data dented the market confidence. Despite a slight improvement in the Chinese PMI data, the ongoing decline in factory gate prices raises the risk of deflation in China.

Meanwhile, the domestic inventory continued to remain healthy, which, according to Helixtap market intelligence, amounts to around 1.3 million tons. According to some sources, a portion of Chinese buying has shifted to warehouse purchases. This caused a slight drop in TSR 20 and mixture grades, but overall, the stock level remained high. The August 2024 inventory level for TSR 20-on warrant was around 155% higher than August 2023. 

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Shaky buyer’s confidence caps further rise; China active on weak US dollar

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1920/mt FOB Bangkok Laem Chabang, steady
• Helixtap assessed SIR20 US$1810/mt FOB Belawan Surabaya, steady
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, steady
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, steady

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 26,100/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 56.5/kg ex-works, down THB 0.5
• Helixtap assessed Bulk latex US$1550/mt FOB Bangkok Laem Chabang, up US$110

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1830/mt FOB Ho chi minh, up US$30
• Helixtap assessed SMR20 US$1930/mt FOB Klang Penang, up US$30
• Helixtap assessed TSR 20 US$1880/mt CIF China, up US$45

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2015/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1995/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The physical rubber market treaded sideways during the Asian trade day despite the continued surge in Thai raw material prices. Meanwhile, the Chinese market saw some upticks due to a weakening US dollar, which capped any price correction.

Thai USS/RSS rally continues 

The rally in Thai USS and RSS prices persisted throughout the day, driven by persistent concerns about a supply shortage due to adverse weather conditions. According to Malaysian Rubber Board production data, Thailand's cumulative production in the first five months of 2024 is around 40% lower than the corresponding time frame in 2023.

While this includes the wintering period, which is a low production time, the “bumpy” transition from El Niño to La Niña has resulted in a shortage of supplies, and some Thai producers believe the ongoing situation is likely to continue in the coming weeks as well. 

According to Helxitap market intelligence, Thai USS was around THB 81-THB 83/kg. “Further rise is possible; it depends on the weather,” added a Thailand-based producer. The latex prices also experienced an uptick, with a weekly rise of more than US$100/mt.

Meanwhile, there was some uptick in buying, which lent further support to the prices. Some buyers have been delaying their bookings, waiting for prices to stabilize post-wintering. However, with the continued unexpected rains, they have no option to buy at the current market levels. "Buyers are coming back because they are underbought," said another Thailand-based producer source. There was increased interest from the domestic Thai market and Malaysia. 

While the latex prices are yet to hit the peak of 2024 at US$1710/mt on FOB basis as of June 7, the current levels are significantly higher by around 32% from early January levels. The highest latex prices reached this year were around , almost at part with cup lump. However, as of August 30, the difference in price between Thai cup lump and Latex was over US$100/mt, leading producers to anticipate further increases in latex prices. Thai cup lump prices, however, this week was largely stable despite the shortage. 

Furthermore, Indian demand for RSS has provided some support for prices. According to market sources, the Indian buyers are willing to accept offers for Thai RSS at around US$ 2800-US$ 2900/mt on a FOB basis. According to a trader source, the RSS space is currently a seller's market.

Non-supportive fundamentals and macro indicators 

In the international market, the elevated price levels have largely sidelined buyers. The market was characterized by limited offers, which led to a decrease in market activity. Some sellers were willing to lower their offers because there was still room for margin given the overall upward bias in the market.

However, China saw some uptick during the day, amid the weakness in the US dollar. Despite market resistance, which led to a slight correction in offer levels, the Chinese market reported trade activity. On a CIF basis, STR 20 mixture offers dropped to around US$1900-US$1910/mt, with trades concluding at US$1880/mt.

This does not reflect the true state of demand, which remains muted. Moreover, there is an expectation that China's factory activity might continue to decline in August as well. This underscores the need for the government to prioritize boosting consumer spending as a means of promoting domestic economic growth.

A prolonged downturn in the property sector for the past three years has significantly impacted consumer spending.

Spot rally sees resistance, Thai USS continues north 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1920/mt FOB Bangkok Laem Chabang, down US$30
• Helixtap assessed SIR20 US$1815/mt FOB Belawan Surabaya, down US$25
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, down US$30
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, down US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2015/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1990/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

During the Asian trade day, the spot price rally finally met resistance in the market, resulting in a correction in prices across the board. This resulted in some sellers and buyers opting to stay out of the market. However, given the forecast for continued rains in Thailand, Thai USS/RSS prices remained northbound. 

Technical correction in the spot market

The week's steep price hike came to a halt, followed by a slight correction due to a dearth of buying interest and fundamental support. Some market participants were expecting a price correction because the spot prices were overinflated.

According to a producer source, fundamentals typically do not support a one-way street. The offer levels experienced a significant decline, with the traded level for SIR 20 reported around US$1810-US$1815/mt on a FOB basis.

There was some correction in the offer level for STR 20 as well, despite the raw material shortage in the country. According to Helixtap market sources, the offers for STR 20 dropped from around US$40/mt to US$1930-US$1940/mt on a FOB basis.

Buying from China also slowed down during the day, with sources stating that Chinese buyers are not chasing for offers today. A Singapore-based source added that the demand was weak during the day and there was limited interest for prompt shipments, largely to cater to immediate requirements. The tire manufacturers also continued to stay on the sidelines. 

The recent buying frenzy in China was largely arbitrage rather than actual demand. Thus, a slowdown was due sooner or later. Moreover, a faltering Chinese economy, combined with the ongoing trade war with the West, where Canada was a recent addition, would weigh on export demand.

Increased competition for the EU market 

Meanwhile, it appears that competition for the EU market is increasing, as evidenced by a recent correction in AFR offers for the European market, based on CIF. On a CIF basis, the offers for AFR 10 were approximately US$1790-US$1810/mt.

Some lower trades for SIR 20 into the European market were also reported at around US41815-US$1820/mt on FOB basis the previous day. This underscores the urgency among the sellers to liquidate volume, which indicates ample supply and bearish demand. 

Despite the fact that Thailand's raw material shortage has been driving up prices, the market's overall sentiment has been negatively impacted by these lower offers, as demonstrated during the Asian trade day.

Thai USS rally continues 

Meanwhile, the USS/RSS market's shortage-induced rally continued throughout the day. Some buyer sources reported a significant increase in prices over the past two days, with prices trading between US$2800-US$2900/mt on a FOB basis during the day. However, the market participants are still assessing the limit of the impact of the rains in Thailand. 

According to Dr. S. Abhilash, Director of the Advanced Centre for Atmospheric Radar Research at Cochin University of Science and Technology in Kochi, India, there are predictions of intense weather patterns in the western and south-western regions of Thailand, Vietnam, and Cambodia. 

He added that there was a triple La Nina event from 2020-2022, followed by an El Nino year in 2023. We anticipate a La Nina year in 2024, potentially leading to increased rainfall.

"The Madden-Julian Oscillation (MJO) is expected to remain active for the next four weeks over the Maritime continent and Western Pacific regions, which include Thailand, Vietnam, and Cambodia. This will result in heavy to very heavy rainfall. There is the possibility of storm formation in the Western Pacific region as well. Moreover, a shift is taking place from ENSO neutral condition to La Nina, which is also conducive for rains in the region,” said Dr Abhilash.

Price rally continues on supply tightness 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1950/mt FOB Bangkok Laem Chabang, up US$30
• Helixtap assessed SIR20 US$1835/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1810/mt CFR Hamburg Rotterdam, up US$30
• Helixtap implied AFR10 US$1770/mt FOB Abidjan, up US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2040/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$2020/mt FOB Abidjan

Market sentiment was “Bullish” - Helixtap sentiment tracker 

The physical rubber price rally continued, resulting in some sellers and buyers hugging the sidelines. While the rally does lend some support for the rubber market, it has heightened the apprehension of steep correction it might witness as the supply situation eases.

STR strongest in the block

During the day, the offer level for STR 20 saw a significant surge, nearing the US$2000/mt level market. These elevated levels were last seen in early 2021 and 2017. The shortage of raw materials in Thailand due to heavy rains is largely responsible for the steep rally.

According to market sources, August typically sees an uptick in production before the monsoons in the southeast Asian region in Q4. However, heavy rains have impacted Thai production, limiting supply. Moreover, there is demand for RSS, especially from India, lending more buoyancy to the prices. “The rain does give strong support; resistance is broken,” said a Singapore-based source.

A Thailand-based producer source believes the steep price hike might lead to some panic among the buyers. During the day, he saw some uptick in the inquiries as buyers were either trying to buy or short cover. The traded level for Thai RSS during the day was around THB 76-77.5/kg, and for field latex, it was around THB 66-67.5/kg.

According to the Meteorological Department of Thailand (TMD), the heavy rains would continue until the end of the month. Even though the market conditions are favorable for the physical prices, there is some trepidation among the market participants about the surge's longevity, despite the floods and heavy rains in Thailand.

A trader source added that unless these floods and rain last for more than two weeks, it is unlikely such a steep hike in the prices would not meet resistance from the market. A complete recovery in rubber prices would also require support from demand. Even though there are talks of rate cuts by the FED in September, China is still coping with an uneven recovery, which would keep demand tepid.

Tiremakers at the back foot even in China, traders bridge the gap

Meanwhile, the Chinese market continued to remain active despite the fact that the tire makers opted to stay out of the market. According to Helixtap sources, most of the buying is coming from the dealers, traders, or arbitrage buyers. 

The trades for STR 20 mixture were reported at around US$188-US$1890/mt on a CIF basis in China. Even there was buying interest for African rubber as a trader source noted he has seen strong demand at the moment with the traded level for AFR 10 into China around US$1740-US$1750/mt on FOB basis. 

Meanwhile, the international tire makers also opted to stay on the sidelines. Some buyer sources noted that the offers today are “very expensive” and added it is better to stay on the sidelines to assess the situation. 

SIR: most economical option yet booking positive margin

Amid all the rallies, SIR 20 failed to reflect similar optimism. Despite a slight increase in prices during the day, SIR 20 remained the most cost-effective choice in the Asian market. On a FOB basis, trades for SIR 20 ranged from US$1830-US$1835/mt, with the highest offers hovering around US$1860/mt.

As a result, the gap between STR 20 and SIR 20 as of August 28 is around US$115/mt. Even offers for SVR 10, which are around US$1850-US$1860/mt on FOB during the day are higher than traded level for SIR 20. 

Furthermore, due to the early onset of winter in certain parts of Indonesia, the prices of raw materials continued to trend upward. However, the Indonesian producers seemed comfortable at these levels. The average cost of production for Indonesian producers is around US$1780-US$1790/mt, which, despite weakness in the US dollar and rising raw material costs, has managed to keep them in a positive position.

STR hits 42-month high amid supply shortage, resilient Chinese buying 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1920/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1820/mt FOB Belawan Surabaya, up US$25
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2025/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1990/mt FOB Abidjan

Market sentiment was “Bullish” - Helixtap sentiment tracker 

STR 20 prices have picked up momentum and broke through the US$1900/mt mark as of August 27, 2024, for the first time since early 2021. The strengthening of Thai rubber prices observed in recent days is supported by various factors, including a shortage of raw material supply driven by heavy rains and flooding in parts of Thailand. 

STR driven by raw material prices 

While the international demand continues to remain tepid, some recovery in demand, especially from the arbitrage buyers in China, coupled with some fiscal support from the Chinese government has lent further support. 

Although some participants were concerned that a sharp rise may cause a price correction in the coming days, especially amid a lack of strong demand from tire makers, the supply side has shown continuous support for the market prices.

According to a Thailand-based source, "USS or RSS is the price leader in Thailand, and everything else is following its lead." However, the Thai cup lump prices have not changed much this week.

Meanwhile, the rain situation in Thailand has started to impact some tapping activities. According to Thai producer sources, parts of northern Thailand are affected, so supply from Chiangrai is seeing some aftermath. 

The offers for STR 20 were around US$1930-US$1940/mt on a FOB basis, while the traded level for STR 20 mixtures inched up to US$1855-US$1860/mt on a CIF China basis. 

According to Helixtap market intelligence, the Chinese buying is active, but there is no apparent rebound in real demand as the economy is still struggling to recover. According to industry reports, some tire enterprises have seen a decrease in production and are being careful about making any large orders at the current high prices. 

The buying continued from the traders, or “arbitrage players,” which does heighten the apprehension among the market participants that as the frenzy eases, the prices will see a step correction. 

According to Helixtap data, STR 20 prices last breached the US$1900 level market in February 2021, while the country was experiencing the aftereffects on production due to the lockdowns during the pandemic, coupled with some post-pandemic demand revival.

Early wintering in Indonesia lent some support to Indo prices.

Meanwhile, there were reports of early wintering in parts of Indonesia, impacting the supply of raw materials in the region. Even though the impact was not as massive as in Thailand, there was some support for Indonesian prices during the day.

Market sources noted that even the regular buyers opted to stay out of the market to assess the price movement. There were hardly any firm offers for SIR 20 in the market during the Asian trade day. Some trades for the SIR 20 mixture were reported into China at a price range of approximately US$1835-US$1840/mt, calculated on a CIF basis.

Rubber witnesses strong opening on expectations around China’s stimulus 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1900/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1795/mt FOB Belawan Surabaya, up US$20
• Helixtap assessed AFR10 US$1760/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1720/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2050/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$2000/mt FOB Abidjan

Market sentiment was “Bullish” - Helixtap sentiment tracker 

The rubber spot market had a strong opening of the week, mirroring the buoyancy in the commodities market on the back of talks of Chinese stimulus. However, demand-wise, the market continued to remain muted. 

Sentimental support for prices not fundamental support 

There was upward bias in the physical rubber prices during the Asian trade day driven by the reports of the Chinese government’s stimulus to increase the liquidity in the market. As a result, offers and traded levels inched up during the day. 

Several market sources observed a surge in the general sentiment within the Chinese commodities market, a trend that also extended to the rubber market. To increase liquidity, the People's Bank of China extended the maturity of medium-term loans. Due to ongoing economic challenges, the market expects more easing measures due to the ongoing challenges faced by the economy.

However, the outlook for domestic demand in China continues to remain pessimistic, given the weakness in retail sales. The indicators suggest sluggish growth momentum. While some believe the northbound movement will continue, others believe the lack of demand support will cap any unexpected surge in prices. 

Furthermore, continued weakness in the US dollar has been a major contributing factor in supporting prices. A weaker dollar and cautious remarks from U.S. Federal Reserve Chair Jerome Powell have bolstered the possibility of an interest rate reduction in September.

However, some trades for the STR 20 mixture were reported at around US41835–US$1840/mt on a CIF basis, with SIR 20 also booking similar levels. However, in the international market, STR 20 offers, as per market sources, have breached the US$1900/mt level, while SIR 20 offers were around mid-US$1800/mt.. 

Support from raw material shortages and price surges 

While the demand has not seen much recovery barring some arbitrage buying in China, the raw material shortage has also been a contributor to the ongoing rebound in prices. Heavy rains in Thailand have kept the supply tight, and talks of defaults in Vietnam have also impacted sentiment.

Furthermore, reports of wintering in south Sumatra and Java have provided some support for Indonesian raw material prices. While the prices did not reach the heights of mid-June, Indonesian farmgate prices, according to Helixtap data, are around 12% higher than early January levels and around 4% higher than early August levels compared to August 26. 

Given the current prices, it is possible that the market participants are considering whether the supply shortage has already been factored in and if a technical correction might occur in the upcoming weeks.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Rally in spot driven by raw material prices and Chinese buying 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1880/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1775/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1740/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1700/mt FOB Abidjan, up US$10

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,800/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 57/kg ex-works, up THB 4
• Helixtap assessed Bulk latex US$1440/mt FOB Bangkok Laem Chabang, up US$85

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1800/mt FOB Ho chi minh, down US$35
• Helixtap assessed SMR20 US$1870/mt FOB Klang Penang, up US$70
• Helixtap assessed TSR 20 US$1835/mt CIF China, up US$60

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2030/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1980]/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The climb in the spot market continued as increased rainfall in Thailand impacted the supply during the week. Furthermore, the uptick in Chinese buying, along with the weakness in the US dollar, kept the market upbeat.

Thailand's raw material surge—the core of the uptick 

Supply, especially from Thailand, owing to unpredictable weather conditions, has been challenging since the last quarter of 2023. Even though rain is not unusual during this period, the heavy amount of rain has impacted the tapping activities. 

According to Helixtap market intelligence, there are heavy rains in Thailand's northern province. Due to a shortage of Thai USS, market sources say prices are rising.

However, a Thailand-based producer source noted that the offer prices are on the rise, but the buyers are apprehensive to accept these levels. Thai USS was around THB 74–75/kg, and field latex was around THB 64–THB 65, with cup lump prices now rising to THB 57–THB 58/kg.

While the demand since the beginning of 2024 has been irregular, the shortage due to adverse weather conditions has been a key trigger to keep the market upbeat. According to the Thai Meteorological Department forecasts, there is a possibility of isolated heavy rains in the Northeast, Central, East, and Lower South regions, with chances of isolated very heavy rains and flash floods in the North. 

On an annual comparison, Thai cup lump prices are around 32% higher than the August 25, 2023 levels, and latex prices saw a 30% rise. Even compared to the early January level, cup lump and latex prices are around 18–20% higher as of August 23. 

The effect is seen across the board 

The impact is evident across the board, with TSR prices seeing a significant surge, especially for STR and SMR, which are reliant on Thai raw materials following export restrictions on African cup lumps. On a FOB basis, there were offers for SMR 20 during the day, ranging from US$1900/mt to US$ 1935/mt. Meanwhile, STR 20 offers inched up to US$1890/mt on a FOB basis.

OSE also experienced the spillover impact, trading higher during the day, primarily due to the increase in RSS prices.

However, Indonesian rubber did not experience a similar price increase due to limited buying interest. Indonesian rubber is also experiencing some premium adjustments for EUDR-approved rubber, according to Helixtap market intelligence. There were limited offers during the day, with the traded level around US$1770-US$1780/mt on a FOB basis.

The Chinese buying rebound kept market confidence buoyant

The active China market has also been a major support for market sentiment this week. Earlier this week, some market sources noted that, in view of the ongoing shortage in the market, some Chinese buyers are actively purchasing TSR and selling natural rubber, anticipating that the spread will increase in the upcoming weeks.

Meanwhile, the traded level for STR 20 mixture was around US$1830-US$1835/mt, and for AFR 10, it was around US$1700-US$1710/mt, both on a CIF basis, during the day.

Buyer’s hesitation weighs on spot; Chinese buying inclined for RMB deals

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1870/mt FOB Bangkok Laem Chabang, steady
• Helixtap assessed SIR20 US$1760/mt FOB Belawan Surabaya, down US$5
• Helixtap assessed AFR10 US$1730/mt CFR Hamburg Rotterdam, down US$5
• Helixtap implied AFR10 US$1690/mt FOB Abidjan, down US$5

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2015/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

During the Asian trading day, the physical rubber market experienced a slight slowdown as buyers chose to remain on the sidelines, unwilling to accept higher offers. However, buyers continued to increase their activity in the Chinese market, favoring the Yuan over the US dollar. buyers moving to the Yuan over the US dollar. 

Buyers hesitation weighs on the spot market

There was apprehension among the buyers owing to the elevated physical price levels. While Indonesian and African prices saw some downward pressure, Thai rubber held steady amid rising raw material prices and increased activities in the EUDR space. 

Moreover, the buyers opted to slowdown ahead of the GAPKINDO dinner. However, there appears to be increased concern among Indonesian producers about declining interest in SIR 20 in the physical market, despite the fact that it is the most economical option.

There were hardly any offers on the market. However, some producers anticipate that there may be a surge in buying as the EUDR implementation date approaches.

Increased activities in China 

Meanwhile, market activities in China continued to remain strong. However, some market sources noted that the buying interest was largely for Yuan offers over US dollars, given the volatility in the forex market.

The traded level for STR 20 was around US$1780-US$1785/mt on a CIF basis, and for the STR 20 mix, it was around US$1785-US$1790/mt on a CIF basis. However, some of the higher offers for the STR 20 mixture were around US$1850-US$1860/mt on a CIF basis. 

Given the volatility in forex, the spike in TSR prices has been steeper on the basis of the US dollar compared to the basis of the yuan. As shown on the graph below, STR 20 and SIR 20 prices based on the US dollar saw a surge of around 9.1% and 6.8%, respectively, as of August 22, compared to July 31. However, as of August 22, STR 20 and SIR 20 prices based on Yuan saw a surge of around 8% and 5.9%, respectively, compared to July 31.

Widening spread between Thai Cup lump and TSR 

According to some market sources, some Chinese buyers are buying a considerable volume at the physical market and selling natural rubber, as they expect the spread to widen in the coming weeks. 

The graph above illustrates the diverging trend in the spread between Thai cup lump and STR 20, and Indonesian cup lump and SIR 20. Thai producers are seeing a spread of US$249/mt between cup lump and TSR, which is similar to early January levels. For Indonesian producers, the gap narrowed to US$76/mt from US$244/mt as of January 5.

Spot upbeat despite widening bid offer gap

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1870/mt FOB Bangkok Laem Chabang, up US$15
• Helixtap assessed SIR20 US$1765/mt FOB Belawan Surabaya, up US$7.5
• Helixtap assessed AFR10 US$1735/mt CFR Hamburg Rotterdam, up US$12.5
• Helixtap implied AFR10 US$1695/mt FOB Abidjan, up US$12.5

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2020/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1975/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The widening spread between bid and offer gaps failed to check the upward bias in the physical rubber market, largely triggered by weakness in the US dollar and an uptick in interest for EUDR cargoes. In addition, some recent purchases from India have added to the market's optimism. However, the overall apprehension about the sustainability of the price recovery persists.

The Thai price reflected support for higher raw materials

The Thai rubber grades exhibit the highest activity and superior performance during the daytime. On the one hand, bad weather conditions have kept the supply tight; on the other hand, producers' inclination to sell into the EUDR market has given the market some buoyancy.

While international demand remains tepid, the producers were not too keen to adjust the prices downward. This resulted in a widening of the bid and offer gap. On a CIF basis, there were offers for the STR 20 mixture at around US$1850-US$1860/mt, whereas the bids were at US$1790-US$1795/mt. “I don't think they (Thai producers) can go much lower with cup lump at THB 56/kg,” said a trader source.

China showed some buying interest, but the weakness of the US dollar largely restricted the buyers to purchasing in Yuan. The resilience in the market surprised the market participants, as some noted that the market is quite firm on pricing despite prices going up, even on the China side. 

Meanwhile, a Thailand-based source attributed this upward bias to the farmers’ intention to sell only into EUDR inquiries, leading to a shortage in the physical market. “We are seeing a lot of turbulence in the Thai market due to EUDR pricing,” he added.

Indian buying comes to support 

In addition, some upticks in buying from India, especially for RSS rubber, also elevated the price levels for Thai rubber. There were reports of USS berig offered at around THB 74/kg, and some producer sources noted that some traded levels were around THB4–THB 5/kg higher. 

However, the majority of Indian buyers now have coverage. Furthermore, Indian domestic prices have seen some corrections since the start of the week. According to Helixtap market intelligence, Indian prices have peaked and have dropped to INR 230/kg (US$2740/mt as of August 21 exchange level) from INR 245-250/kg (US$2920-US$2980/mt as of August 21 exchange level) earlier. Trader sources noted that they do not see much interest compared to a couple of months ago. 

SIR 20 is struggling to find a market 

Meanwhile, despite being the most economical option in the Asian market, SIR 20 continued to struggle to find buyers. Even from China, there was some interest in EUDR rubber, but the producers expect that activities in the EUDR space will increase in the coming months.

The traded level for SIR 20 during the day was around US$1765/mt on a FOB basis, but the uptick in prices was relatively conservative. This is impacting margins as raw material prices, even in Indonesia, continue to surge. 

CORRECTION: Please note that on August 21, there was a correction in the price assessment for SIR 20, FOB BLW/SBY, due to technical difficulties. The correct assessment for the day for SIR20 is US$1765/mt FOB BLW/SBY, as opposed to the assessment published at US$1760/mt FOB BLW/SBY.

Spot upbeat on heightened Chinese activities 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1855/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1757.5/mt FOB Belawan Surabaya, up US$2.5
• Helixtap assessed AFR10 US$1722.5/mt CFR Hamburg Rotterdam, up US$2.5
• Helixtap implied AFR10 US$1682.5/mt FOB Abidjan, up US$2.5

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2012.5/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1962.5/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

During the Asian trade day, the Chinese market's optimism had a spillover effect on the international physical rubber market. However, a lack of international demand capped a steep uptrend. Meanwhile, supply shortages in Thailand continued to support TRS prices. 

Upbeat Chinese market

Following reports of leaf diseases in Yunnan, the market saw an uptick in Chinese buying. The surge in interest in dry latex had a spillover effect across the board. The traded level for the STR 20 mixture saw a spike of around US$20–US$30/mt on a CIF basis. 

However, market sources noted that most of the buying was from the traders, and the Chinese tire makers opted to stay on the sidelines owing to the elevated levels. There was more interest in forward cargoes than prompt ones. A Singapore-based source said, “A lot of people are buying far away and selling nearby.”

While this kept the market firm and sentiment positive, it indicates that some market participants expect prices to find more support in the coming weeks. A producer based in Thailand reported receiving inquiries from China, albeit in smaller volumes, and does not expect repeated inquiries.

Some Indonesian producers, echoing similar sentiments, added that they have seen increased Chinese activity this week. However, the purchases have been in smaller quantities. Moreover, some believe that a shortage of Thai raw materials, coupled with defaults in Vietnam, is further supporting the pricing sentiment.

Clearly, the ongoing shortage is likely to be short-lived, as will the buying and price increases. Meanwhile, at the SHFE level, TSR inventory saw some week-on-week drops in the week ending August 16. However, the SHFE TSR stock level has seen a continued marginal decline since late July, which could also be a contributing factor for some revival in buying. 

Indonesia is struggling to find buyers 

On the other hand, Indonesian rubber is seeing limited buying interest from the market despite being the most economical option in the Asian market. On a FOB basis, SVR 10, which is also experiencing some raw material shortages, is offered around US$10–US$20/mt more than SIR 20.

Regular Japanese tire makers showed some interest in the SIR 20 market, but the traded level remained range bound at around US$1755–US$1760/mt on a FOB basis. Helixtap market intelligence indicates that the purchasing of Indonesian rubber primarily favors EUDR-compliant rubber over the spot market.

Thailand supply tightness continues

The weather continued to remain bad, with reports of heavy rains in Thailand. A Thailand-based producer source noted that the supply is tight due to continued rains. However, there were no reports of flooding yet. Meanwhile, the offer level for STR 20 was around US$1900-US$1905/mt on FOB, making it more expensive than SIR 20. A continuity in this trend might result in some buying shifts in the spot market. 

Supply shortage & weak USD keep spot firm

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1835/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1755/mt FOB Belawan Surabaya, up US$5
• Helixtap assessed AFR10 US$1720/mt CFR Hamburg Rotterdam, up US$5
• Helixtap implied AFR10 US$1680/mt FOB Abidjan, up US$5

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2010/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1960/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Some supply tightness, especially in China, coupled with continued weakness in the US dollar nudged the physical prices up during the Asian trade day despite tepid international demand. The market participants expect more support this week. However, if the market overheats, a lack of demand would dampen optimism.

Some raw material supply challenges

While Thailand braces for an imminent monsoon downpour and the potential for flooding, reports of a shortage of raw materials in Yunnan have also surfaced. This led to a spike in market prices during the Asian trading day.

According to some market sources, there were reports of leaf fall disease in Yunnan, which has impacted Chinese raw material supplies. During the day, there was a surge in demand for latex from China. As a result, the market is experiencing a spillover effect.

According to a trader source, there was a surge in the latex price, which is now moving higher than the cup lump, and the gap between the prices is likely to widen. On a CIF basis, the STR 20 mixture traded around US$1780-US$1785/mt during the day, maintaining its Friday levels despite overall bearishness in downstream demand.

Meanwhile, Thailand is also experiencing adverse weather conditions. The Meteorological Department of Thailand (TMD) has issued a warning regarding heavy rainfall and the possibility of flooding in 49 provinces across Thailand as a result of the monsoon. Some Thailand-based sources noted that the supply has been affected for some time now, and the only factor capping a sharp uptick is limited buying. 

According to Helixtap data, compared to January levels, Thai cup lump prices were up 6%, while latex prices moved up by 18% as of August 16, 2024. On a week-on-week basis as well, cup lump prices trended downward and latex moved up.

The Indonesian farmgate cup lump prices, which were about 2% higher as of August 19 compared to August 12, showed a similar trend.

Weaker USD is also supporting prices

Furthermore, the US dollar, which traded at its lowest point since mid-January, is also causing some support for prices. The market is focusing on the Fed's stance on US monetary policies, as well as the upcoming PMI data.

A producer source noted that the market is “awfully quiet” and the uptick is only sentiment-driven. Despite reports of trades for SIR 20 in the range of US$1755–US$1760/mt on a FOB basis, the US dollar's weakness continues to erode the producers' margins.

According to market sources, the ongoing forex volatility and the supply challenge will provide some support to the market, but the impact will be short-lived unless there is demand support.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

SIR 20 makes in-road into China 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1825/mt FOB Bangkok Laem Chabang, down US$ 5
• Helixtap assessed SIR20 US$1750/mt FOB Belawan Surabaya, down US$ 5
• Helixtap assessed AFR10 US$1715/mt CFR Hamburg Rotterdam, down US$ 5
• Helixtap implied AFR10 US$1675/mt FOB Abidjan, down US$ 5

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,500/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 53/kg ex-works, down THB 1
• Helixtap assessed Bulk latex US$1355/mt FOB Bangkok Laem Chabang, down US$15

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1765/mt FOB Ho chi minh, up US$20
• Helixtap assessed SMR20 US$1800/mt FOB Klang Penang, up US$30
• Helixtap assessed TSR 20 US$1775/mt CIF China, up US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2005/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1955/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

Being the most economical option, SIR 20 makes inroads into the Chinese market during the Asian trade day. Meanwhile, international demand continued to remain tepid, adding pressure on prices.

Trade flow increases into China

With the widening spread between SIR 20 and other alternative sources, the SIR is finally making inroads into the Chinese market. According to market sources, some producers were offering SIR 20 into the Chinese market at around US$1770/mt on a CIF basis. According to a producer source, the increase in trade flow is possible because international demand for SIR 20 is not that high.

Indonesian producer sources noted that the offer levels are not as low as expected. The expectation is that if the price trend continues, Indonesian rubber inflows into China will increase. The gap between the STR-20 mixture is around US$5–US$15/mt. 

A weather-related shortage in Thailand has led to an uptrend in Thai cup lump prices, which have elevated STR prices levels in recent times. The recent unfavorable weather conditions in Thailand and Yunnan production areas, along with some restocking from overseas tire makers, have resulted in a slight rise in both Chinese domestic and international rubber prices.

Despite the ongoing market volatility, downstream buyers are approaching with careful consideration amid the ongoing volatility in the market. According to customs data, there has been a 96% rise in imports from Indonesia in June compared to April levels.

Muted international buying and limited market activities 

Meanwhile, the weakness in international demand weighed on spot market sentiment. According to various market sources, there were very few offers in the physical market. Last week's market turbulence has swiftly receded following a series of U.S. economic data this week that alleviate concerns about a significant downturn.

There are no longer any signs of a recession, and the market is expecting the Fed  to keep up with rate cuts. There are still expectations that the Bank of England will lower rates at least once more this year, as inflation pressures decrease and the outlook for Britain's economy for the rest of 2024 becomes less optimistic.

 Forex and defaults kept spot firm

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1830/mt FOB Bangkok Laem Chabang, up US$30
• Helixtap assessed SIR20 US$1755/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1720/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1680/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2010/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1960/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Dwindling international demand failed to dampen the optimism in the spot rubber price during the Asian trade day amid volatility in forex coupled with talks of some “defaults” in Vietnam. Meanwhile, despite the slowdown in July factory output, China also saw increased market activity.

Sellers are reluctant to lower prices

With the ongoing weakness in the US dollar, the producers held on to their offers throughout the day, despite limited buying interest in the international market. While the elevated levels kept some of the key buyers on the sidelines, market sources noted that the muted market activities failed to deter the sellers. 

The offers for SIR 20 inched up to US$1760-US$1770/mt on FOB, relatively higher than the previous day’s traded level, limiting deal conclusions. This is the fair value for SIR 20, according to the Indonesian producer. In addition to strengthening the Indonesian Rupiah, there was also a surge in raw material prices, which further capped any possibility of correction.

According to a Singapore-based source, the stronger rupiah actually puts the producers in the red, even if they sell at US$1750/mt and trade at a US$1.5/mt premium. According to Helixtap data, Indonesian cup lump prices saw a 1% rise in the Indonesian Rupiah against a 3% rise in the US dollar. In August, Indonesian producers' average cost of production rose by around 3% compared to July, keeping their margins negative.

In Vietnam, talks of defaults are also affecting prices

Meanwhile, rumors of defaults from Vietnam have further supported the prices. Some market sources noted that the defaults were due to a shortage of raw materials. Others, however, believe that some producers and processors may be choosing to hold back due to the rise in raw material prices.

Since January, SVR 10 prices have risen significantly. According to Helixtap data, SVR 10 prices rose by approximately 16% in August 2024, compared to early January levels. In terms of rubber production capacity, Vietnam may not be a market mover. Despite some supply tightness in Thailand, any further shortage could raise prices. However, the muted buying would cap any unforeseen hike in the overall prices.

On a FOB basis, offers for SVR 10 were around US$1780-US$1790/mt, which is higher than offers for SIR 20 in the physical market.

Despite the slowdown in July factory output, China remains active

China remained active throughout the day, with some upticks in prices, particularly for Thai rubber. With trades for the STR 20 mixture reported around US$1780-US$1785/mt on a CIF basis, “Today prices went quite high as compared to yesterday,” said a trader source. 

According to industry reports, there has been some improvement in the capacity utilization of the tire factories in China, which may have resulted in some better buying. Inventory levels also continued to remain healthy, indicating the recent uptick is likely to be short-lived. 

Moreover, China's factory output experienced a slowdown in July. However, there was a slight improvement in the consumer sector as stimulus measures aimed at households started to have an impact. According to the National Bureau of Statistics (NBS) latest data, industrial output expanded by 5.1% compared to the previous year, slower than June levels.

Sellers sidelined amid weakness in USD

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1800/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1740/mt FOB Belawan Surabaya, down US$5
• Helixtap assessed AFR10 US$1700/mt CFR Hamburg Rotterdam, down US$10
• Helixtap implied AFR10 US$1660/mt FOB Abidjan, down US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1995/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1940/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

Weakness in the US dollar kept sellers out of the market amid the weakness in demand during the Asian trade day. Meanwhile, buyers also stayed on the sidelines, barring some arbitrage buying and muting market activities. 

Forex volatility bothers the producers.

While demand remained largely subdued during the day, the volatility in the forex market caused producers and processors to be apprehensive about entering the market. The US dollar's weakness against Asian currencies dented margins, keeping producers on the sidelines.

An Indonesian producer observed that in an ideal market scenario, the prices should have increased by approximately US$20–US$30 per metric ton due to the appreciation of the Indonesian rupiah. However, due to the tepid demand, the trend has shifted towards the south, causing confusion among producers.

Another producer source said, “The Indonesian Rupiah strengthened too much. There is no point to offer at these levels.” He added that there was limited interest among the buyers, resulting in the wait-and-watch mode.

The scarcity of offers limited the market's activities. A Thai producer source noted that forex was causing problems in the Thai market today.

The Thai baht dropped under the 35 level vs. the US dollar, while the Indonesian rupiah was close to the 16,000 level. This has resulted in a more conservative rebound in TSR prices in domestic currencies versus the USD dollar.

According to Helixtap data, as of August 14, SIR 20 and STR 20 prices saw a 5% rise compared to August 1 spot market levels. However, there was just a 1% surge in SIR 20 prices based on Indonesian Rupiah and a 3% rise in STR 20 prices based on Thai Bhat. The direct impact of this would be on the margins of producers, who are already grappling with rising costs and declining market prices.

Rains in Thailand intensify. 

Meanwhile, supply remained tight in Thailand due to heavy rain forecasts. According to a Thai trader source, South Thailand is bracing for heavy rains over the next five days. A Thailand-based producer source noted that there are forecasts of heavy rains, but the supply is already low. 

However, because of weakening demand and appreciation in Thai Baht, the raw material prices are not seeing support. Thai cup lump during the day was around THB 53–THB 54/kg ex works, which the producer source noted as rather low. 

Awaiting the return of European and US demand 

The market participants are waiting for US and European buyers to return from the summer holidays. The market was quiet, and various sources expect that only a revival in buying from the western market will bring some stability.

Meanwhile, the US dollar lost strength following the release of July's underwhelming US Producer Price Index (PPI) data. This has heightened market expectations for a possible 50 basis point reduction by the Federal Reserve during its upcoming September meeting. This could possibly lead to a resurgence in demand for rubber. However, it is unlikely the impact would be immediate. Meanwhile, during the day, there was some arbitrage buying interest from China, but the Chinese tire makers opted to stay on the sidelines.

Uptick in buying sentiment nudged prices up

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1810/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1745/mt FOB Belawan Surabaya, up US$5
• Helixtap assessed AFR10 US$1710/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1670/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2000/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1950/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

During the Asian trade day, a resurgence in buying, particularly from tiremakers, pushed the spot market upwards. While some market participants attributed the current uptick to some tiremakers' restocking, others were apprehensive about the optimism's sustainability.

Buyers restocking

This week's increased inquiries from some of the major tiremakers have resulted in some improvement in market sentiment and activities. There was a general increase in prices across the board.

According to Helixtap market intelligence, SIR 20 traded at US$1745/mt on a FOB basis during the day, remaining range-bound. However, the uptick was more prevalent for Thai rubber, where offers were around US$1880–US$1890/mt on a FOB basis.

Some market sources believed that the current purchase was part of some restocking on the tire-maker's end. Nevertheless, there is still no indication of a real, sustained demand revival. “We are seeing some requests for offers, but nothing firm so far,” said a Singapore-based source.

While Thai rubber continued to find support owing to higher raw material prices, Thai producer sources noted last week that the heavy rains in Thailand are impacting the supply of latex, which has kept the STR 20 price level at the higher end of the market.

Additionally, Chinese traders showed more buying interest. With the traded level for the STR mix seeing around a US$30–US$35/mt rise compared to the previous day, the sentiments remained buoyant. However, the upsurge in the market is unlikely to last for more than a fortnight, noted a trader source.

There has also been an uptick in demand from India. Indian tire producers recently imported 30,000 tons of compound rubber from ASEAN countries, according to Indian smallholders. This is because compound rubber does not attract a 25% duty, thanks to a Free Trade Agreement (FTA) with these countries. Instead, it has a 10% lower duty. "It looks like China and India will also be aggressive buyers this week," said another trader source.

Meanwhile, according to customs data, Indian imports rose by around 4% in May compared to last year and are now around 14% higher than imports in April.

Indo-producer opts for EUDR contracts despite a slight decline in premium

Meanwhile, premiums for Indonesian EUDR rubber have seen a slight decline lately. Market sources report that Indonesian rubber commands a premium of approximately US$4250–US$260/mt, whereas Thai rubber commands a premium of US$290–US$300/mt. Some Indonesian producers, on the other hand, prefer to sell spot EUDR contracts because of the elevated levels of LTC premiums this year.

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1790/mt FOB Bangkok Laem Chabang
• Helixtap assessed SIR20 US$1740/mt FOB Belawan Surabaya
• Helixtap assessed AFR10 US$1690/mt CFR Hamburg Rotterdam
• Helixtap implied AFR10 US$1650/mt FOB Abidjan

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2020/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1930/mt FOB Abidjan

Market sentiment was “Slightly Bullish” - Helixtap sentiment tracker 

China shows an uptrend, global markets bearish

The Chinese market reported some activities, whereas international markets reeled under the stock market free fall and oil price declines amid abysmal US economic projections on Monday.

The Asian market kept the momentum seen towards the end of last week, at the beginning of this week as well. Amid holidays in Japan and Thailand, not many trades were done, but the Chinese players showed some appetite for buying.

Limited trades were done in SIR20 for US$1730-1740/MT FOB October/November.  SMR20 cargoes were traded for US$1755-1765/MT FOB October.

Traders did not report much demand for Indo cargoes. As it was a Thai holiday, trades were hard to come by for STR20.

Though the China traders and other players were engaged in some activities, it did not lead to volume trades as they mainly focused on booking profits.

Japanese financial markets, including rubber futures, were closed on August 12 due to a public holiday, and trading will resume on August 13.

Chinese rubber futures stage a good show

Meanwhile the Chinese rubber futures edged higher on August 12, supported by rising oil prices. However, gains were limited, with traders remaining guarded ahead of key economic data releases from the U.S. and China.

The January rubber contract on the Shanghai Futures Exchange (SHFE) ended up 0.22%, at US$2,221.71/MT.

The September rubber contract on Singapore SICOM platform last traded at 171.4 U.S. cents per kg, up 0.8%.

Oil prices climbed for the fifth straight session, maintaining last week's gains of over 3%, as concerns over a U.S. recession subsided and geopolitical tensions in the Middle East continued to bolster prices.

China is expected to release retail sales and industrial production data on August 15. These data are likely to indicate ongoing economic sub-par performance, highlighting the continued need for additional stimulus measures.

China's consumer prices increased at a somewhat higher rate than anticipated in July, while producer deflation continued. This reflects subdued beneath-the-surface consumption trends, posing a challenge to policymakers.

Thailand supply disruption likely to continue

Meanwhile, Thailand continues to experience heavy rain in the week, and the rubber-growing Southern Thailand (East Coast) is forecast to witness scattered thundershowers until August 18, while scattered to fairly widespread thundershowers and isolated heavy rains are forecast during the same period for Southern Thailand West Coast. The continuing supply disruption are set to linger impacting prices.

The Thai Met Department said a moderate monsoon trough lies across the North region of Thailand and upper Laos into the low-pressure cell over upper Vietnam.

It said people in Thailand should beware of heavy rains and accumulations that may cause flash floods and overflows, especially along foothills near waterways and lowlands.

Meanwhile the Indian rubber production has become active with rains receding for the past few days and the higher domestic prices driving the spirits of the producers and traders who are beginning to exploit the current situation.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Weakness in US dollar brought Chinese buying back

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1910/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1785/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1760/mt CFR Hamburg Rotterdam, up US$ 30
• Helixtap implied AFR10 US$1720/mt FOB Abidjan, up US$ 30

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 26,600/kg ex-works, up IDR 500
• Helixtap assessed Thai raw material THB 57/kg ex-works, up THB 0.5
• Helixtap assessed Bulk latex US$1540/mt FOB Bangkok Laem Chabang, down US$10

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1810/mt FOB Ho chi minh, down US$20
• Helixtap assessed SMR20 US$1900/mt FOB Klang Penang, down US$30
• Helixtap assessed TSR 20 US$1850/mt CIF China, down US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan

Market sentiment was “Neutral” - Helixtap sentiment tracker 

An uptick in Chinese buying, coupled with weakness in the US dollar, kept market sentiment buoyant during the Asian trade day. However, international buyers continued to stay on the sidelines amid the ongoing volatility. 

Fickle Chinese buying confuses the market 

After some slowdowns following reports of stock rotation in China, there was some uptick in Chinese buying during the day. Market sources reported a lack of genuine demand support. The majority of inquiries came from arbitrage buyers or traders.

In contrast to the offers for the STR 20 mixture, which were in the range of US$1885-US$1895/mt on a CIF basis, the traded level was approximately US$1840-US$1850/mt. Chinese traders are optimistic about the future of the rubber market, which, according to sources, has been the primary factor driving consistent buying.

The bullishness is largely based on the raw material shortage seen in the international market due to unprecedented heavy rains in Thailand and winter in parts of Indonesia. There were reports of some uptick in tire production. According to industry experts, the tire industry is undergoing a significant transition leading to a redistribution of market share, moving away from major manufacturers and toward tire producers located in Asia. In the second quarter of this year, Chinese tire exports saw a 4% rise compared to the corresponding period last year. 

It is not that the Chinese market is experiencing a massive decline in inventory levels. As per Helixtap market intelligence, the Chinese market has around 1.3 million tons of rubber stock. While there were some dips in the TSR 20 and TSR mixture cargoes, as per the market sources. However, a Singapore-based source noted that he has not seen them replenishing that yet. In addition, the volatility in the forex is also impacting the buying as they expect the weakness in the US dollar to continue amid expectation of Fed rate cuts this month. 

Volume flow into China improved in July

According to customs data, there has been a significant increase in volume flow into China, particularly from Indonesia, due to lower SIR 20 prices. Compared to January levels, Chinese imports of Indonesian rubber have increased by around 82%. 

There has also been an increase in imports from Thailand. Even though the import volume in July was lower than the highest of the year in February, there was a 42% rise in imports in July compared to January. 

The uptick in raw material prices has slowed, but they are still on the higher end

Meanwhile, the surge in Thai raw material prices, particularly RSS prices, has slowed down this week. There are reports of scattered rains still impacting the tapping activities, which capped a significant correction in the prices. In addition to some correction in Indian domestic prices, it is likely the bid level of the Indian buyers would see some correction weighing upon the international levels as well. 

Shaky buyer’s confidence caps further rise; China active on weak US dollar

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1920/mt FOB Bangkok Laem Chabang, steady
• Helixtap assessed SIR20 US$1810/mt FOB Belawan Surabaya, steady
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, steady
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, steady

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 26,100/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 56.5/kg ex-works, down THB 0.5
• Helixtap assessed Bulk latex US$1550/mt FOB Bangkok Laem Chabang, up US$110

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1830/mt FOB Ho chi minh, up US$30
• Helixtap assessed SMR20 US$1930/mt FOB Klang Penang, up US$30
• Helixtap assessed TSR 20 US$1880/mt CIF China, up US$45

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2015/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1995/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The physical rubber market treaded sideways during the Asian trade day despite the continued surge in Thai raw material prices. Meanwhile, the Chinese market saw some upticks due to a weakening US dollar, which capped any price correction.

Thai USS/RSS rally continues 

The rally in Thai USS and RSS prices persisted throughout the day, driven by persistent concerns about a supply shortage due to adverse weather conditions. According to Malaysian Rubber Board production data, Thailand's cumulative production in the first five months of 2024 is around 40% lower than the corresponding time frame in 2023.

While this includes the wintering period, which is a low production time, the “bumpy” transition from El Niño to La Niña has resulted in a shortage of supplies, and some Thai producers believe the ongoing situation is likely to continue in the coming weeks as well. 

According to Helxitap market intelligence, Thai USS was around THB 81-THB 83/kg. “Further rise is possible; it depends on the weather,” added a Thailand-based producer. The latex prices also experienced an uptick, with a weekly rise of more than US$100/mt.

Meanwhile, there was some uptick in buying, which lent further support to the prices. Some buyers have been delaying their bookings, waiting for prices to stabilize post-wintering. However, with the continued unexpected rains, they have no option to buy at the current market levels. "Buyers are coming back because they are underbought," said another Thailand-based producer source. There was increased interest from the domestic Thai market and Malaysia. 

While the latex prices are yet to hit the peak of 2024 at US$1710/mt on FOB basis as of June 7, the current levels are significantly higher by around 32% from early January levels. The highest latex prices reached this year were around , almost at part with cup lump. However, as of August 30, the difference in price between Thai cup lump and Latex was over US$100/mt, leading producers to anticipate further increases in latex prices. Thai cup lump prices, however, this week was largely stable despite the shortage. 

Furthermore, Indian demand for RSS has provided some support for prices. According to market sources, the Indian buyers are willing to accept offers for Thai RSS at around US$ 2800-US$ 2900/mt on a FOB basis. According to a trader source, the RSS space is currently a seller's market.

Non-supportive fundamentals and macro indicators 

In the international market, the elevated price levels have largely sidelined buyers. The market was characterized by limited offers, which led to a decrease in market activity. Some sellers were willing to lower their offers because there was still room for margin given the overall upward bias in the market.

However, China saw some uptick during the day, amid the weakness in the US dollar. Despite market resistance, which led to a slight correction in offer levels, the Chinese market reported trade activity. On a CIF basis, STR 20 mixture offers dropped to around US$1900-US$1910/mt, with trades concluding at US$1880/mt.

This does not reflect the true state of demand, which remains muted. Moreover, there is an expectation that China's factory activity might continue to decline in August as well. This underscores the need for the government to prioritize boosting consumer spending as a means of promoting domestic economic growth.

A prolonged downturn in the property sector for the past three years has significantly impacted consumer spending.

Rally in spot driven by raw material prices and Chinese buying 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1880/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1775/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1740/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1700/mt FOB Abidjan, up US$10

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,800/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 57/kg ex-works, up THB 4
• Helixtap assessed Bulk latex US$1440/mt FOB Bangkok Laem Chabang, up US$85

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1800/mt FOB Ho chi minh, down US$35
• Helixtap assessed SMR20 US$1870/mt FOB Klang Penang, up US$70
• Helixtap assessed TSR 20 US$1835/mt CIF China, up US$60

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2030/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1980]/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The climb in the spot market continued as increased rainfall in Thailand impacted the supply during the week. Furthermore, the uptick in Chinese buying, along with the weakness in the US dollar, kept the market upbeat.

Thailand's raw material surge—the core of the uptick 

Supply, especially from Thailand, owing to unpredictable weather conditions, has been challenging since the last quarter of 2023. Even though rain is not unusual during this period, the heavy amount of rain has impacted the tapping activities. 

According to Helixtap market intelligence, there are heavy rains in Thailand's northern province. Due to a shortage of Thai USS, market sources say prices are rising.

However, a Thailand-based producer source noted that the offer prices are on the rise, but the buyers are apprehensive to accept these levels. Thai USS was around THB 74–75/kg, and field latex was around THB 64–THB 65, with cup lump prices now rising to THB 57–THB 58/kg.

While the demand since the beginning of 2024 has been irregular, the shortage due to adverse weather conditions has been a key trigger to keep the market upbeat. According to the Thai Meteorological Department forecasts, there is a possibility of isolated heavy rains in the Northeast, Central, East, and Lower South regions, with chances of isolated very heavy rains and flash floods in the North. 

On an annual comparison, Thai cup lump prices are around 32% higher than the August 25, 2023 levels, and latex prices saw a 30% rise. Even compared to the early January level, cup lump and latex prices are around 18–20% higher as of August 23. 

The effect is seen across the board 

The impact is evident across the board, with TSR prices seeing a significant surge, especially for STR and SMR, which are reliant on Thai raw materials following export restrictions on African cup lumps. On a FOB basis, there were offers for SMR 20 during the day, ranging from US$1900/mt to US$ 1935/mt. Meanwhile, STR 20 offers inched up to US$1890/mt on a FOB basis.

OSE also experienced the spillover impact, trading higher during the day, primarily due to the increase in RSS prices.

However, Indonesian rubber did not experience a similar price increase due to limited buying interest. Indonesian rubber is also experiencing some premium adjustments for EUDR-approved rubber, according to Helixtap market intelligence. There were limited offers during the day, with the traded level around US$1770-US$1780/mt on a FOB basis.

The Chinese buying rebound kept market confidence buoyant

The active China market has also been a major support for market sentiment this week. Earlier this week, some market sources noted that, in view of the ongoing shortage in the market, some Chinese buyers are actively purchasing TSR and selling natural rubber, anticipating that the spread will increase in the upcoming weeks.

Meanwhile, the traded level for STR 20 mixture was around US$1830-US$1835/mt, and for AFR 10, it was around US$1700-US$1710/mt, both on a CIF basis, during the day.

SIR 20 makes in-road into China 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1825/mt FOB Bangkok Laem Chabang, down US$ 5
• Helixtap assessed SIR20 US$1750/mt FOB Belawan Surabaya, down US$ 5
• Helixtap assessed AFR10 US$1715/mt CFR Hamburg Rotterdam, down US$ 5
• Helixtap implied AFR10 US$1675/mt FOB Abidjan, down US$ 5

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,500/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 53/kg ex-works, down THB 1
• Helixtap assessed Bulk latex US$1355/mt FOB Bangkok Laem Chabang, down US$15

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1765/mt FOB Ho chi minh, up US$20
• Helixtap assessed SMR20 US$1800/mt FOB Klang Penang, up US$30
• Helixtap assessed TSR 20 US$1775/mt CIF China, up US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2005/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1955/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

Being the most economical option, SIR 20 makes inroads into the Chinese market during the Asian trade day. Meanwhile, international demand continued to remain tepid, adding pressure on prices.

Trade flow increases into China

With the widening spread between SIR 20 and other alternative sources, the SIR is finally making inroads into the Chinese market. According to market sources, some producers were offering SIR 20 into the Chinese market at around US$1770/mt on a CIF basis. According to a producer source, the increase in trade flow is possible because international demand for SIR 20 is not that high.

Indonesian producer sources noted that the offer levels are not as low as expected. The expectation is that if the price trend continues, Indonesian rubber inflows into China will increase. The gap between the STR-20 mixture is around US$5–US$15/mt. 

A weather-related shortage in Thailand has led to an uptrend in Thai cup lump prices, which have elevated STR prices levels in recent times. The recent unfavorable weather conditions in Thailand and Yunnan production areas, along with some restocking from overseas tire makers, have resulted in a slight rise in both Chinese domestic and international rubber prices.

Despite the ongoing market volatility, downstream buyers are approaching with careful consideration amid the ongoing volatility in the market. According to customs data, there has been a 96% rise in imports from Indonesia in June compared to April levels.

Muted international buying and limited market activities 

Meanwhile, the weakness in international demand weighed on spot market sentiment. According to various market sources, there were very few offers in the physical market. Last week's market turbulence has swiftly receded following a series of U.S. economic data this week that alleviate concerns about a significant downturn.

There are no longer any signs of a recession, and the market is expecting the Fed  to keep up with rate cuts. There are still expectations that the Bank of England will lower rates at least once more this year, as inflation pressures decrease and the outlook for Britain's economy for the rest of 2024 becomes less optimistic.

Typhoon triggered defaults nudged spot prices up 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1935/mt FOB Bangkok Laem Chabang, up US$25
• Helixtap assessed SIR20 US$1805/mt FOB Belawan Surabaya, up US$20
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2010/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1990/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Physical rubber prices gained strength during the Asian trade day as a typhoon in Vietnam disrupted the supply chain, limiting supply in the market. In addition, increased inquiries from the Chinese tire makers for the prompt cargoes resulted in further support for the prices. 

Weather disruption continues to weigh on supply 

There were reports of defaults in Vietnam, resulting in some supply shortages in the market. According to Helixtap market intelligence, the default volume amounts to around 450,000 tons of shipments. 

Various sources noted that this was the impact of the Typhoon in Vietnam. There were reports of landslides and floods triggered by Typhoon Yagi, and the National Centre for Hydro-Meteorological Forecasting noted that the aftereffects are likely to linger for some more time. 

Despite Vietnam's status as a minor rubber producer, the impact of any supply disruption intensifies in a market already experiencing some shortages due to heavy rains in Thailand. According to a producer source, the impact becomes more significant when the majority of Vietnamese rubber is exported to China. Thus, he added, the "price to default is huge."

Meanwhile, reports indicated that Vietnamese RSS prices ranged from US$2100-US$2160/mt on a FOB basis, while SVR 10 offers surged to US$1860/mt on the same basis. According to a trader source, "Super typhoon Yagi has given the Vietnamese ample reason to put a rocket to prices."

Chinese tire makers back to cover 

As a result of the defaults, there was some uptick in buying interest from Chinese tiremakers. While Chinese buyers have been actively buying over the past few weeks, the buying was largely restricted to arbitrage buyers or traders. Market sources, however, noted that there were inquiries from Chinese tire makers during the day looking for prompt shipments.

On a CIF basis, the offers for the STR 20 mixture ranged between US$1890-US$1925/mt. However, a trader source noted that there was a wide gap between bid and offer. Moreover, the buyers were keen on booking from Chinese traders rather than looking for shipments in the international market. 

Even though imports of Vietnamese rubber into China dropped by 27% in July compared to July last year, there has been more than a 200% rise in trade flow since May 2024. 

Thailand and Indonesian production are also under duress

In Thailand, the Meteorological Department of Thailand (TMD) has issued warnings regarding the likelihood of flash floods. There has been some slowdown in the surge in Thai raw material prices, but with rain forecasts, the supply might tighten further. Some buyer sources noted that there were some very high offers for STR 20 during the day, which kept them on the sidelines. 

The situation was somewhat similar in Indonesia, as rains and wintering continued to impact the supply. Factorygate cup lump prices reached around IDR 27,000 during the day, seeing a jump of around IDR 500-IDR 800 compared to September 6. 

A trader source noted that Indonesian RSS 1 offers were now around US$2430-US$2440/mt, whereas the sellers opted not to offer SIR 20 during the day. 

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Weakness in US dollar brought Chinese buying back

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1910/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1785/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1760/mt CFR Hamburg Rotterdam, up US$ 30
• Helixtap implied AFR10 US$1720/mt FOB Abidjan, up US$ 30

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 26,600/kg ex-works, up IDR 500
• Helixtap assessed Thai raw material THB 57/kg ex-works, up THB 0.5
• Helixtap assessed Bulk latex US$1540/mt FOB Bangkok Laem Chabang, down US$10

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1810/mt FOB Ho chi minh, down US$20
• Helixtap assessed SMR20 US$1900/mt FOB Klang Penang, down US$30
• Helixtap assessed TSR 20 US$1850/mt CIF China, down US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan

Market sentiment was “Neutral” - Helixtap sentiment tracker 

An uptick in Chinese buying, coupled with weakness in the US dollar, kept market sentiment buoyant during the Asian trade day. However, international buyers continued to stay on the sidelines amid the ongoing volatility. 

Fickle Chinese buying confuses the market 

After some slowdowns following reports of stock rotation in China, there was some uptick in Chinese buying during the day. Market sources reported a lack of genuine demand support. The majority of inquiries came from arbitrage buyers or traders.

In contrast to the offers for the STR 20 mixture, which were in the range of US$1885-US$1895/mt on a CIF basis, the traded level was approximately US$1840-US$1850/mt. Chinese traders are optimistic about the future of the rubber market, which, according to sources, has been the primary factor driving consistent buying.

The bullishness is largely based on the raw material shortage seen in the international market due to unprecedented heavy rains in Thailand and winter in parts of Indonesia. There were reports of some uptick in tire production. According to industry experts, the tire industry is undergoing a significant transition leading to a redistribution of market share, moving away from major manufacturers and toward tire producers located in Asia. In the second quarter of this year, Chinese tire exports saw a 4% rise compared to the corresponding period last year. 

It is not that the Chinese market is experiencing a massive decline in inventory levels. As per Helixtap market intelligence, the Chinese market has around 1.3 million tons of rubber stock. While there were some dips in the TSR 20 and TSR mixture cargoes, as per the market sources. However, a Singapore-based source noted that he has not seen them replenishing that yet. In addition, the volatility in the forex is also impacting the buying as they expect the weakness in the US dollar to continue amid expectation of Fed rate cuts this month. 

Volume flow into China improved in July

According to customs data, there has been a significant increase in volume flow into China, particularly from Indonesia, due to lower SIR 20 prices. Compared to January levels, Chinese imports of Indonesian rubber have increased by around 82%. 

There has also been an increase in imports from Thailand. Even though the import volume in July was lower than the highest of the year in February, there was a 42% rise in imports in July compared to January. 

The uptick in raw material prices has slowed, but they are still on the higher end

Meanwhile, the surge in Thai raw material prices, particularly RSS prices, has slowed down this week. There are reports of scattered rains still impacting the tapping activities, which capped a significant correction in the prices. In addition to some correction in Indian domestic prices, it is likely the bid level of the Indian buyers would see some correction weighing upon the international levels as well. 

Slight uptick in spot with support from raw materials 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1900/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1775/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1730/mt CFR Hamburg Rotterdam, steady
• Helixtap implied AFR10 US$1690/mt FOB Abidjan, steady 

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1980/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1940/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

There was some optimism in the physical market, largely driven by the northbound raw material prices. With the overall demand continuing to be sluggish, Chinese buying slows down as the buyers await the stock disposal. 

Spot driven by raw material prices 

The market saw limited activity as some buyers opted to stay on the sidelines amid the ongoing market volatility. While the prices saw a steep upward trend last week, they saw some support during the day this week following a significant correction.

The trigger for the market has been limited supply for raw materials and an associated hike in the prices. Some Indonesian producer sources noted that the supply has tightened due to the ongoing wintering in Indonesia.

According to an Indonesian producer source, prices did not see any correction over the past three days, largely due to limited supplies. Indonesian cup lump prices were reportedly in the range of IDR 26,200-IDR 26,500/kg ex-works. 

The shortage of raw materials, along with some optimism in European macro indicators, supported the prices during the day. Furthermore, the US dollar's weakness has also been a key factor in some price recovery. Trades for SIR 20 were reported in the range of US$1765-US$1775/mt on a FOB basis, slightly higher than the previous day.

Furthermore, reports of rain and thunderstorms in Thailand have kept the country's supply tight. Producer sources noted that prices for field latex have been holding firm, and the ripple effect was seen in the TSR market as well. 

In terms of margin, Thai producers appear to be in a more secure position than their Indonesian counterparts. According to Helixtap data, the spread between cup lump and TSR 20, which was in the range of US$240-US$260/mt in early January for Indonesia and Thailand, has seen some drastic change. 

As of September 5 market levels, the spread between Thai cup lump and STR 20 is around US$180/mt, and for Indonesian rubber, the spread is around US$85/mt, which is significantly lower than January levels. 

China slowing down 

Meanwhile, market activities slowed down in China during the day, with sources noting limited buying interest and a widening bid and offer gap. While there was some buying interest, the frenzy seen last week has calmed down. On a CIF basis, there were offers for STR 20 mixture in the range of US$1875-US$1895/mt, but the buying interest was around US$1800-US$1810/mt.

China's economy continues to struggle despite multiple attempts to stimulate growth, including measures aimed at addressing the challenges in its property market.

Meanwhile, some optimism from Europe lent some support to the market sentiment amid stronger German industrial orders data and the eurozone retail sales figures. Furthermore, the speculation surrounding the Federal Reserve's move to potentially initiate its anticipated cycle of interest rate cuts weighed on the US dollar, but kept the rubber market upbeat on some recovery in demand.

Jitters around Chinese stock rotation weighs on spot; Raw material prices continue to surge

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1880/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1760/mt FOB Belawan Surabaya, down US$10
• Helixtap assessed AFR10 US$1730/mt CFR Hamburg Rotterdam, down US$10
• Helixtap implied AFR10 US$1690/mt FOB Abidjan, down US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1965/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1940/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The anticipation around the Chinese stock rotation kept the market sentiment bearish, weighing upon the spot prices during the Asian trade day. Meanwhile, reports of worsening weather conditions in Thailand and wintering in Indonesia resulted in firm raw material prices. 

Jitters amid market participants around China’s stock rotation

Confirmed reports of China selling off its older rubber stock to the market heightened the anticipation of a further downtrend in prices during the day. According to market sources, rumors of around 100,000 mt of older rubber stock are due to be sold off into the market around mid-September. 

Even though there was no confirmation on the volume to be liquidated, there was a significant slowdown in market activities. The offer levels persisted in their correction, with trades for SIR 20 reported in the range of US$1755-US$1765/mt on a FOB basis.

Market participants found there was little buying interest and deemed the market weak. Given that the sell-off is scheduled for mid-September, it is likely that prices will remain soft for the first half of the month.

On a FOB basis, there was some correction in the offer level for STR 20 to around US$1900-US$1905/mt. However, the market expects that the price decline will be short-lived.

The recent increase in Chinese domestic and international raw material prices resulted in a hike in spot levels. In addition, according to industry reports, there is an increase in downstream tire production. Thus, the market believes that in the short term, the prices might witness some correction but would continue to exhibit strength given the supply condition.

"Futures may be weakening, but I do not see a connected weakening on physical levels." There are some discounts available on some specific grades (where sellers may have built old stocks), but generally, physicals are pretty firm,” said a Thailand-based source.

Raw material prices firming up

On the other hand, raw material prices continued to trend upward in both Thailand and Indonesia. While there are forecasts of further heavy rains in Thailand, Indonesia is currently experiencing wintering.

A Thailand-based source noted that there are predictions about weather disturbances either already here or fast approaching. Some Thai producers believe that this year, overall rubber production from Thailand would be around 10-15% lower than 2023.

According to some sources, there is a significant demand for Thai RSS and latex, as the available volumes at Thai auctions are booked quickly. “One wouldn't say that there is any evident struggle to move volumes—definitely not for RSS, not for Latex and Skim,” the Thailand-based source said, adding the selling pressure is more at the processed rubber segment.

Indonesia is also seeing some support for raw material prices due to wintering. Some Indonesian producer sources noted that the supply for cup lump is limited in the market, which weighs on the margins amid weakness in demand for TSR. 

According to Helixtap farmer’s data, Indonesian farmgate cup lump prices saw a 17% rise as of September 4, compared to early January levels. 

Market slumped on talks of Chinese stockpile rotation 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1890/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1770/mt FOB Belawan Surabaya, down US$5
• Helixtap assessed AFR10 US$1740/mt CFR Hamburg Rotterdam, down US$20
• Helixtap implied AFR10 US$1700/mt FOB Abidjan, down US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1975/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1950/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The spot rubber market witnessed a decline in the price level during the Asian trade day as talks of Chinese stockpile rotation made rounds in the market. Across the board, the correction kept some sellers on the sidelines. Meanwhile, some Thai producers chose to maintain their offers despite a correction in raw material prices.

China set to flush the market 

Talks of China rotating its stockpile impacted the overall market sentiment, weighing on the pricing level. According to Helixtap market intelligence, the volume of stock to rotated is yet unclear. However, some sources noted that they would be selling off the older stock.

Despite the expectation of official news on August 4, the discussions surrounding it have eroded market confidence. The government will sell a lot of stockpiles back into the market, which is causing prices to go lower, said a Singapore-based source. 

In late June and early July this year, the Chinese government bought over 50,000 mt of rubber for restocking, resulting in some initial uptick followed by some stalling of the physical rubber prices despite the onset of the new season. This led to concerns among some market participants about the potential severity of the impact on prices.

Meanwhile, some sources believe that the sell-off could represent the liquidation of some non-EUDR complainant rubber. However, Helixtap was unable to confirm this information.

Price pressure for the short term 

The impact directly affected the prices, which are likely to endure pressure for a brief period before recovering. There was a significant drop in the African rubber prices during the day, which according to some sources was an attempt to move more volume before the prices drop further. The traded level for AFR 10 was approximately US$1730-US$1735/mt on a CIF basis for China. The offers to the European market also dropped to US $1750-US$1770/mt on a CIF basis. 

There were also some trades for SIR 20, with the traded level around US$1765-US$1770/mt on a FOB basis. However, there was some hesitation among the Indonesian producers to lower their offers further, as they are currently either selling at cost or close to it. A trader source observed that sellers were making limited offers, as their prices were now nearly at cost. The physical market is slipping, and there is too much pressure from the paper markets, according to a producer source. 

STR trying to hold steady 

Meanwhile, the offers for STR 20 for the international market held steady throughout the day, despite some changes in raw material prices. According to a Thailand-based source, Thai RSS prices also saw some correction, which has been the key price driver in the recent week. 

On a FOB basis, the offers for STR 20 were between US$1910 and US$1920/mt. Some trades for STR 20 mixture were reported around US$1815-US$1820/mt on a CIF basis.

Spot corrects as buyers fall back; China moves to warehouse buying   

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1900/mt FOB Bangkok Laem Chabang, down US$20
• Helixtap assessed SIR20 US$1775/mt FOB Belawan Surabaya, down US$35
• Helixtap assessed AFR10 US$1760/mt CFR Hamburg Rotterdam, down US$20
• Helixtap implied AFR10 US$1720/mt FOB Abidjan, down US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$1980/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The physical rubber market experienced a soft start to the week due to a technical correction during the Asian trade day. Meanwhile, there was a slight slowdown in China as buyers shifted their purchases to domestic warehouses amid continued healthy inventory levels.

SIR witnesses the sharpest drop 

While there were corrections across the board, SIR 20 saw the steepest decline. Indonesian processed rubber has been struggling to find interest lately, putting prices under pressure. Market sources reported that SIR 20 traded at around US$1775-US$1780/mt on a FOB basis, marking the steepest intraday drop since early June.

The major Indonesian rubber buyers were sidelined today. As a result, some market participants believe these volumes might be desperate sales in an effort to keep the volume moving. With reports of early wintering in Indonesia, the raw material prices have been on a rise, which is likely to weigh on the margin. “I think everyone is waiting today,” said an Indonesian producer source, given the market lost the momentum it gathered last week. 

Other Asian grades, despite the correction, continued to maintain their premium over SIR 20. On a FOB basis, the SVR 20 offers were around US$1830-US$1840/mt, and the STR 20 offers were around US$1910-US$1920/mt.

Higher raw material costs boosted Thailand's prices. According to Helixtap market intelligence, it ranged between THB 56.5 and THB 59/kg, depending on the volume. The overall buying interest was limited. 

A Thailand-based source noted that Thai Bhat has weakened for the first time in the past two months, resulting in some price easing. “The prices have climbed up too much too fast,” he added. However, if the heavy rains continue, along with the rising interest among the sellers to push volume for the EUDR market, the price levels are likely to remain elevated.

The Chinese slowdown also impacted the sentiment

China also slowed down during the day. There was still some buying interest, with trades for STR 20 mixture reported in the range of US$1845-US$1860/mt on CIF basis, against the offer level of US$1880-US$1890/mt on CIF basis. 

Some market sources attributed the market's weakness to a slowdown in China. In addition, the bearish economic data dented the market confidence. Despite a slight improvement in the Chinese PMI data, the ongoing decline in factory gate prices raises the risk of deflation in China.

Meanwhile, the domestic inventory continued to remain healthy, which, according to Helixtap market intelligence, amounts to around 1.3 million tons. According to some sources, a portion of Chinese buying has shifted to warehouse purchases. This caused a slight drop in TSR 20 and mixture grades, but overall, the stock level remained high. The August 2024 inventory level for TSR 20-on warrant was around 155% higher than August 2023. 

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Shaky buyer’s confidence caps further rise; China active on weak US dollar

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1920/mt FOB Bangkok Laem Chabang, steady
• Helixtap assessed SIR20 US$1810/mt FOB Belawan Surabaya, steady
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, steady
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, steady

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 26,100/kg ex-works, up IDR 300
• Helixtap assessed Thai raw material THB 56.5/kg ex-works, down THB 0.5
• Helixtap assessed Bulk latex US$1550/mt FOB Bangkok Laem Chabang, up US$110

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1830/mt FOB Ho chi minh, up US$30
• Helixtap assessed SMR20 US$1930/mt FOB Klang Penang, up US$30
• Helixtap assessed TSR 20 US$1880/mt CIF China, up US$45

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide for SIR20 is US$2015/mt FOB Belawan Surabaya
• Helixtap ESG price guide AFR10 is US$1995/mt FOB Abidjan

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The physical rubber market treaded sideways during the Asian trade day despite the continued surge in Thai raw material prices. Meanwhile, the Chinese market saw some upticks due to a weakening US dollar, which capped any price correction.

Thai USS/RSS rally continues 

The rally in Thai USS and RSS prices persisted throughout the day, driven by persistent concerns about a supply shortage due to adverse weather conditions. According to Malaysian Rubber Board production data, Thailand's cumulative production in the first five months of 2024 is around 40% lower than the corresponding time frame in 2023.

While this includes the wintering period, which is a low production time, the “bumpy” transition from El Niño to La Niña has resulted in a shortage of supplies, and some Thai producers believe the ongoing situation is likely to continue in the coming weeks as well. 

According to Helxitap market intelligence, Thai USS was around THB 81-THB 83/kg. “Further rise is possible; it depends on the weather,” added a Thailand-based producer. The latex prices also experienced an uptick, with a weekly rise of more than US$100/mt.

Meanwhile, there was some uptick in buying, which lent further support to the prices. Some buyers have been delaying their bookings, waiting for prices to stabilize post-wintering. However, with the continued unexpected rains, they have no option to buy at the current market levels. "Buyers are coming back because they are underbought," said another Thailand-based producer source. There was increased interest from the domestic Thai market and Malaysia. 

While the latex prices are yet to hit the peak of 2024 at US$1710/mt on FOB basis as of June 7, the current levels are significantly higher by around 32% from early January levels. The highest latex prices reached this year were around , almost at part with cup lump. However, as of August 30, the difference in price between Thai cup lump and Latex was over US$100/mt, leading producers to anticipate further increases in latex prices. Thai cup lump prices, however, this week was largely stable despite the shortage. 

Furthermore, Indian demand for RSS has provided some support for prices. According to market sources, the Indian buyers are willing to accept offers for Thai RSS at around US$ 2800-US$ 2900/mt on a FOB basis. According to a trader source, the RSS space is currently a seller's market.

Non-supportive fundamentals and macro indicators 

In the international market, the elevated price levels have largely sidelined buyers. The market was characterized by limited offers, which led to a decrease in market activity. Some sellers were willing to lower their offers because there was still room for margin given the overall upward bias in the market.

However, China saw some uptick during the day, amid the weakness in the US dollar. Despite market resistance, which led to a slight correction in offer levels, the Chinese market reported trade activity. On a CIF basis, STR 20 mixture offers dropped to around US$1900-US$1910/mt, with trades concluding at US$1880/mt.

This does not reflect the true state of demand, which remains muted. Moreover, there is an expectation that China's factory activity might continue to decline in August as well. This underscores the need for the government to prioritize boosting consumer spending as a means of promoting domestic economic growth.

A prolonged downturn in the property sector for the past three years has significantly impacted consumer spending.

Spot rally sees resistance, Thai USS continues north 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1920/mt FOB Bangkok Laem Chabang, down US$30
• Helixtap assessed SIR20 US$1815/mt FOB Belawan Surabaya, down US$25
• Helixtap assessed AFR10 US$1780/mt CFR Hamburg Rotterdam, down US$30
• Helixtap implied AFR10 US$1740/mt FOB Abidjan, down US$30