JPX | Japan Rubber Futures Weekly Report: 16 - 20 January 2023

Last week, rubber prices in both futures and the physical rubber market saw an increment heading into the Lunar New Year. Since the last article, significant policy changes were observed from China. Border restrictions and zero-Covid policies were removed, resulting in positive market sentiment on rubber demand from the world’s largest rubber consumer. Due to holiday celebrations, trading across the exchanges is expected to be muted and resume from 30th January onward.

JPX | Japan Rubber Futures Weekly Report: 21 - 25 November 2022

Rubber prices in the physical and futures markets declined in the past week ended 25 November this year. Chinese Covid policies were last eased in mid-November, changing quarantine measures. With a recent rise in cases, cities like Beijing implemented new testing requirements while Shanghai imposed movement restrictions for new arrivals into the city. In Chengdu, mass testing was also announced, mandating a compulsory test each day for five consecutive days. Consequently, protests emerged over last weekend in several areas within China, demanding ease of mobility rather than having to take a test each time before leaving home. This likely impacted the sentiment for the Chinese economy, causing prices to continue south.

JPX | Japan Rubber Futures Weekly Report: 07 - 11 November 2022

Most major stock indexes listed within the JPX report as well as rubber futures showed an increase in the preceding week ended 11 November this year. Indicators such as a weaker-than-expected US CPI for October and China announcing some relaxation of Covid-19 measures may have contributed to this positive move. The previous Helixtap summary two weeks ago was observed to have prices falling across the board. In comparison, most futures across the exchanges now indicate some price recovery, other than RSS3 Futures in the Osaka Exchange (OSE).

JPX | Japan Rubber Futures Weekly Report: 24 - 28 October 2022

Rubber Futures continued on a decline throughout the month of October, where prices across exchanges saw a third week-on-week fall since end-September. A major reason attributing to the decline are newly announced lockdowns in China and new Omicron variants BF.7 and BA.5. Weaker indicators were also seen in Japan along with a 75bps rate hike by the ECB. Although Chinese GDP growth at 3.9% for the third quarter was higher than the market expectation by 0.4%, overall market sentiment was weak. As mentioned in the previous report summary, lockdowns have led to an expected fall in Chinese rubber demand. The physical rubber market was also flooded with offers from sellers and had low demand despite prices being the lowest since the third quarter of 2020, about 2 years ago.

JPX | Japan Rubber Futures Weekly Report: 10 - 14 October 2022

An increase in speculative selling was observed in the futures market for rubber in the past week, with prices across the board falling throughout the exchanges. The price behaviour in the past week is shown to be in contrast to the slight bump in prices after the Chinese holidays in previous years. Prices retraced most of the gains made in OSE over the last week, and fell lower than the fortnight before in SHFE/INE and in SGX. Reports of heavy rain and floods in rubber-producing regions did not lend much support to rubber prices, but Thai raw materials and latex prices saw a slight bump from the reduction in supply. With new recorded Covid-19 cases in China at the end of last week, demand from China is expected to be weak, with an expected increase in lockdowns.

JPX | Japan Rubber Futures Weekly Report: 26 – 30 September 2022

In the previous week, Futures saw an overall decrease in open interest across the exchanges. Trading activity is expected to shrink heading into the Chinese Golden Week holidays, leading to the reduction in open positions. China reported a slight growth in manufacturing activity, with PMI at 50.1. This marks the first expansion in three months since June this year. Major central banks are likely to follow suit with key interest rate increments since the Fed announcement. European Central Bank officials such as Lithuania’s Gediminas Simkus, Slovakia’s Peter Kazimir and Finland’s Olli Rehn have largely indicated a move of 75bps leading into the upcoming decision on October 27. Such a move will likely contribute to a continued fall of the already abysmal European demand with German inflation exceeding 10%, driven by high energy prices. A double-digit inflation level in Germany was last seen in the 1950s, and is the first time since the Euro was introduced to world financial markets in 1999. All stock indexes listed in the JPX report saw a net fall in the past week due to recessionary concerns.

JPX | Japan Rubber Futures Weekly Report: 12– 16 September 2022

Futures prices saw an increase over the past week after weeks of consistent selling since the start of August. Some positive economic data was seen from China with the lockdown in Chengdu being lifted along with better-than-expected Industrial Production and an increase in Retail Sales in August. These factors may have prompted some short covering behaviour especially in SHFE/INE as a net fall in volume and open interest was seen. The CPI from the US for August was higher than market expectations at 8.3%, further increasing the expectation of a 75bps rate hike at the FOMC meeting this week.

Helixtap Fortnightly Report - H2 August 2022

The spot rubber prices plunged by 5-7% across the basket over the fortnight as the market failed to assess the floor. The European tire sector has been seeing some setbacks and drops in demand amid sanctions, production cutbacks, rising costs, monetary policy tightening, and a potential recession. Unfortunately, the situation has seemed to have aggravated lately. The supply of carbon black and the high energy prices would impact the European tire market. In addition, the uncertainty of the natural gas supply impacted the chemical industry and caused issues with the production of the majority of rubber compound ingredients.

JPX | Japan Rubber Futures Weekly Report: 29 August – 2 September 2022

The preceding week saw an increase in volume amidst a continued downward spiral in prices across the exchanges. Bearish sentiment across the markets remains due to increased expectations of future rate hikes and recessionary fears. China reported PMI for August this year at 49.4, below the neutral level of 50.0, signalling a slight contraction in manufacturing activity. Within China, additional cities have also imposed fresh lockdown measures due to its zero-covid policy. Major cities such as Chengdu, Guangzhou, and Shenzhen have also announced additional restrictions due to a rise in COVID-19 cases. This will subsequently have an impact on Chinese GDP growth, and it is even likelier for the Chinese economy to miss the 5.5% official growth target set earlier in March this year. In Japan, a 13.3% YoY fall in vehicle sales was reported for August this year, further highlighting weak market sentiment.

JPX | Japan Rubber Futures Weekly Report: 15 – 19 August 2022

World rubber futures closed the week lower across all exchanges as new short positions by speculators pushed the prices to the lowest level. This week, there were mountains of bearish news: China reported sluggish economic data, a weaker July Industrial production at 3.8%, and a lower July retail sales +2.75%. In addition to the zero-Covid policy, China is now facing heat waves and drought, which could affect farm production and farmers' lives. China's total vehicle sales fell to 82,235 units in July compared to the previous month of 2,420,058 units.

Helixtap Fortnightly Report - H2 July 2022

The weakness across the board for the spot rubber continued amid global monetary policy tightening, recessionary fears, China’s zero Covid tolerance, and slowing of economies. While the hike in Covid cases in China sapped some confidence, reports of some support for economic recovery from the COVID-19 fallout lifted the futures market sentiment. However, a similar uptick was not seen in the physical market, which remained sluggish. The inflationary pressure also weighed on the global economic sentiment, downcasting Asian currencies against the US dollar, adding to the woes. Furthermore, Thailand and Indonesia also saw multi-year high inflation rates this month.

Margin report - H1 2022

Compounding damage from the Russian invasion of Ukraine, "Zero Covid" policy in China has amplified the slowdown in the global economy. Moreover, as per the World Bank's latest Global Economic Prospects report, the high risk of inflation and tightening monetary policy could lead to a protracted period of weak growth. All these factors boil down to the conclusion that demand and physical prices are likely to remain southbound, at least in the short-midterm period. In an industry where smallholders primarily run the production, the margin becomes of key importance.

Helixtap Fortnightly Report - H2 June 2022

Spot rubber buyers remained uncertain impacting the spot volume movement, especially amid wavering market confidence owing to building inflationary pressure. The western countries are too battling inflation which has kept buying limited. The Fed was looking to increase interest rates again leading to an appreciation in the U.S. dollar keeping the Chinese buyers more reluctant to buy rubber in the U.S. dollar, market sources noted.

JPX | Japan Rubber Futures Weekly Report: 20 – 24 June 2022

World Rubber futures prices closed the week mixed in major exchanges. OSE Nov futures dropped by 0.4% with light trading volume, while the nearest month closed higher due to short-covering with stronger physical demand before the last trading date. Both SHFE and INE rubber futures inched marginally higher with heavy trading volume, but most of the buying seemed for liquidating positions.

Helixtap Fortnightly Report - H1 June 2022

Weak and uncertain global economic outlook continued to weigh down on spot rubber prices in the market. While the US economy is expected to slow, US Treasury Secretary Janet Yellen continues to insist that a full-blown recession is not inevitable. Volatility in oil prices and bearish sentiments indicated a slowdown in overall demand. As a result, the physical market activities remained largely muted, setting a "bearish undertone". Even though a dip in oil prices would translate to some tempering of the inflationary pressure, it also fuels the concerns around an economic slowdown.

JPX | Japan Rubber Futures Weekly Report: 01 – 05 May 2022

World rubber futures prices closed the week mixed in short trading days. OSE RSS3 had two trading days for the Golden Week holidays but returned to close on Friday +0.8% higher. SHFE and INE rubber futures closed almost unchanged, while SICOM rubber futures were -2.6% due to fresh speculative selling pressure.

Helixtap Fortnightly Report - H2 May 2022

The overall sentiment continued to be bearish amid weakness in oil prices, inflationary pressure, and supply bottlenecks. These factors capped the rise in the Indo and Thai spot prices which saw a boost from the renewed optimism around China relaxing its covid restrictions. The market participants are continuously reassessing the possibility of continued tightening by the Fed and other central banks. There is an anticipation of a slowdown in demand which is likely to impact the spot price. Meanwhile, a slight uptick in the futures failed to prop the market confidence.

Helixtap Fortnightly Report - H1 May 2022

Spot rubber prices were largely southbound over the fortnight as the buyers and sellers remained skittish about the bearish outlook led by China’s zero-tolerance of Covid. The situation impacted the market confidence affecting the traders, warehouses, logistics, and most importers who adopt a “wait and see” approach. Furthermore, factory closures also impact tire factories and automobile factories, filtering down to demand for natural rubber.

Helixtap Fortnightly Report - H2 April 2022

Bearish sentiment for rubber prices continued for the rest of the April as concerns around the dissipating demand weigh on the spot market across the board. The economic fallout in China owing to the country's Covid-Zero strategy coupled with lower-than-expected stimulus weighed on the market sentiments. Even though China’s economy expanded 4.8% in Q1 of 2022, much of that growth was recorded in January and February.

Helixtap Fortnightly Report - H1 April 2022

Bear global sentiments continued to weigh on the spot rubber market across the board. With increasing cases of Covid in China and tightening of restrictions, the buying sentiment took a hit.

Helixtap Fortnightly Report - 2H Mar 2022

The overall spot rubber market was largely bearish in the second half of March amid the continued tensions between Russia and Ukraine, while the fresh outbreak of Covid cases in China added to the woes.

Helixtap Fortnightly Report - 1H Mar 2022

Spot rubber market awaits clarity on Russia-Ukraine war, Thai rubber producers’ margin under pressure, Thailand’s rubber production for 2021 likely to be around 4.9 million tons, up 1.82%

Helixtap Fortnightly Report - 2H Feb 2022

Early wintering in Thailand drives raw material prices north, African rubber stays strong amid wintering, Indo finds Japanese buying support, Malaysian rubber production drop 8.7% in 2021

Helixtap Fortnightly Report - 1H Feb 2022

Low long term contract booking weighs on Indo prices, African rubber stays strong, Thai and Indo takes a dip, Thailand sees 9.4% rise rubber export in October 2021

Helixtap Fortnightly Report - 2H Jan 2022

AFR 10 prices rebound on US demand, Leaves disease & early wintering forecast reverses STR and SIR premiums, Malaysian rubber production drops 26%

Helixtap Fortnightly Report - 1H Dec 2021

Higher LTC numbers highlight futures & physical prices de-link, Processed rubber prices for all the sources northbound, Higher STR 20 prices open arbitrage for AFR 10 & SVR

Helixtap Fortnightly Report - 2H Nov 2021

SIR 20 manages to regain the premium over STR 20, Long term contract negotiations for 2022 begin, Rains in Thailand disrupt supply again

Helixtap Fortnightly Report - 1H Nov 2021

STR 20 expensive than SIR 20 first since November 2020, China’s speculative buying send rubber market reeling, ANRPC lowers its global production and demand forecast

Annual Margin Report FY2021 - Indonesia

The slowdown in the global economy on account of the Covid-19 outbreak slowed the demand and impacted the production level. However, the Indonesian government and the major producers are working to improve the factor conditions and margins.