African spot rubber prices spiral on US demand rebound

Rebound in demand from the US sent the African spot rubber prices spiraling up; sources said Helixtap on Friday. Meanwhile, Asian rubber prices saw some uptick owing to the rise in raw material prices.  

Helixtap assessed African Rubber (AFR) 10 at US$1840/mt CFR Rotterdam/Hamburg, up US$ 60 on January 14, 2022.

According to the market sources, the prices are finding some support due to renewed demand from the US. African rubber saw a steady need from the US over the week, seeing a surge of more than 4% over the week, according to Helixtap data. “Demand for sir20 is actually not that good in the USA; most action is on TSR10,” said a market source, explaining the hike in the prices. A few trades for AFR 10 shipments were traded in the range of US$1830-US$1850/mt CIF EU main ports, while the offers hovered in the range of US$1845-US$1855/mt CFR Rotterdam/Hamburg.

Higher raw material prices support Asian rubber

Meanwhile, the surge in Indonesian and Thai raw material prices continued to support the processed rubber prices in the Asian market. Various market sources stated that the Indonesian raw material prices had been northbound while parts of Thailand have been suffering leaves disease, which has impacted the production.

The Association of Natural Rubber Producing Countries (ANRPC) detected an outbreak of a new natural rubber (NR) leaf fall disease in parts of Thailand. As quoted in media reports, it might affect around 16 hectares of rubber plantations, and the Rubber Authority of Thailand is monitoring the situation. “North Thailand has a 40% loss of leaves,” said another market source. 

The offers for February and April shipments of STR 20 were in the range of US$1860- US$1890/mt FOB Bangkok/Laem Chabang, with no buying interest at these levels. Helixtap assessed Standard Thailand Rubber (STR) 20, at US$1845/mt FOB Bangkok/Laem Chabang, up US$10, while Latex Bulk was at US$1340/mt FOB Bangkok/LCB, up US$20, and Thai raw materials at THB 49.5/kg, on January 14, 2022, up THB 2.5/kg on the week-on-week basis. 

There have been regular trades for Indonesian rubber as an economical option. As a result, the offers for March and April shipments of SIR 20 were slightly higher in the range of US$1840- US$1835/mt FOB Belawan/Surabaya, while buying interest also moved up to US$1835- US$1840/mt on FOB basis.Helixtap assessed Standard Indonesia Rubber (SIR) 20 was assessed at US$1840/mt FOB Belawan/Surabaya, up US$12.5, while Indonesian raw material was assessed at IDR 24,500/kg, up IDR 700/kg, over the week on January 14, 2022. 

SIR 20 demand props up on expectation of early wintering in Thailand

Indonesian rubber demand gathered steam buyers flock to build up stock as anticipation of an early wintering in Thailand nudges up Thai rubber prices, sources said Helixtap on Wednesday.

Helixtap assessed Standard Indonesia Rubber (SIR) 20 was assessed at US$1820/mt FOB Belawan/Surabaya, up US$15 on January 7, 2022, while Indonesian raw material was assessed at IDR 23,800/kg, up IDR 1000/kg, over the week.

A few trades were reported for the March shipment of SIR 20 at US$1820/mt FOB Belawan/Surabaya. The offers for similar cargoes were at US$1825- US$1835/mt FOB Belawan/Surabaya, while the buying interest was at US$1815- US$1820/mt on a FOB basis.

There is an anticipation of an early wintering here in Thailand this year. As a result, some market participants noted that tapping might stop by the end of January or early February in most parts of Thailand, about one and a half months earlier than the traditional period.

This has nudged the market participants in securing Indonesian rubber to secure their supply position at better prices before the market increases. Moreover, there was some amid a surge in the Indonesian raw material prices. According to market sources, offers for Indonesian raw material were around IDR 24,000/kg, which could move up to IDR 24,500/kg if the buyers are looking for higher tonnage. In addition to this, appreciation of the US dollar against the Indonesian rupiah has lent some support to  Indonesian processed rubber prices.

Meanwhile, the Thai rubber producers assess their production for the next months and adjust their sold positions accordingly. “Most producers are staying away from the market, more
interested in covering their short positions. Therefore, we will probably continue to see upward movements of latex prices as supply gets tighter,” said a Thai market source.

Helixtap assessed Standard Thailand Rubber (STR) 20, at US$1820/mt FOB Bangkok/Laem Chabang, up US$20, on January 7, 2022, while Latex Bulk was at US$1320/mt FOB Bangkok/LCB, up US$55, and Thai raw materials at THB 47/kg, on January 7, 2022, up THB 0.5/kg on the week-on-week basis.

There is some steady demand from the US and European markets on the African front. According to some market sources, some producers are sold until April, so they chose not to chase the market. They agreed that Europe and US buyers are “paying much better” than China, and demand is sufficient for now.

Helixtap assessed African Rubber (AFR) 10 at US$1760/mt CFR Rotterdam/Hamburg, down US$5 on January 7, 2022. 

Buoyant futures market failed to push Asian spot prices

Asian spot rubber prices remained unchanged despite a buoyant futures market as some optimism amid investors about the severity of the Omicron coronavirus variant boosted the confidence, sources said Helixtap on Friday.
 

Helixtap assessed Standard Thailand Rubber (STR) 20, at US$1750/mt FOB Bangkok/Laem Chabang, Standard Indonesia Rubber (SIR) 20 at US$1775/mt FOB Belawan/Surabaya, and African Rubber (AFR) 10 at US$1690/mt CFR Rotterdam/Hamburg, all unchanged from December 22, 2021.
 

Indonesian raw material was also assessed stable over the week at IDR 22,800/kg. However, given this is the peak production season in Thailand, Helixtap assessed the Latex Bulk at US$1265/mt FOB Bangkok/LCB, stable over the week, and Thai raw materials at THB 46.5/kg, on December 24, 2021, down THB 0.5/kg on the week-on-week basis.
 

The market activities were largely muted as most of the market participants were off the market on account of the festive season.  However, the futures market saw some support on renewed market confidence. Volumes however thinned as a number of markets are operating with reduced hours on Christmas Eve. In addition to this, positive U.S. growth data has been helped coupled with a U.K. study suggesting omicron infections are less likely to be severe.
 

Moreover, as per industry reports, Chinese demand for rubber is likely to see some uptick in January 2022 on the account of the pre-Lunar New Year restocking. China is expected to consume around 500,000 tons each during December 2021 and January 2022, as per industry reports. However, the fast-spreading variant still kept the buyers at the bay as they await more clarity.
 

Please note that Helixtap will publish its daily assessments- SIR 20, STR 20, AFR 10, and weekly assessments – Latex, Thai raw materials, and Indo raw materials on December 24 at 12:30 pm Singapore daily time.
 

Please note that Helixtap will not publish its daily assessments- SIR 20, STR 20, AFR 10, and weekly assessments – Latex, Thai raw materials, and Indo raw materials from December 27 – December 31, 2021. We will resume the publication of the assessments on January 3, 2022.