Rubber Futures Hold in Tight Range

Rubber futures held around 238 US cents per kilogram in late September, moving within a tight range after retreating from a 13-year high reached earlier this month. Immediate supply risks eased somewhat as rainfall in parts of Thailand was expected to improve, potentially supporting rubber tapping, although El Niño-related dryness remains a concern across much of Southeast Asia. Meanwhile, softer demand from China, the world's largest rubber consumer, also weighed on prices as weaker tire production and operating rates reduced raw-rubber purchases. Some manufacturers also plan holiday closures ahead of China's National Day and Mid-Autumn Festival, which could further reduce near-term rubber demand. In the meantime, crude oil prices decreased for the fifth day, making synthetic rubber cheaper and reducing the relative appeal of natural rubber.

Rubber futures have eased in recent days to around 237 US cents per kilogram, their lowest level in more than a week, dampened by softer tyre demand from top buyer China. Analysts at Chaos Ternary Futures Research Institute said average natural rubber purchases by tyre manufacturers declined last week amid rising raw material costs, partly due to higher oil prices. Further declines are expected ahead as some companies plan holiday closures ahead of National Day and Mid-Autumn Festival. Geopolitical tensions in the Middle East and expectations of tighter monetary policy from major central banks also clouded the demand outlook. However, elevated oil prices and concerns over tight supply provided some support as Southeast Asia’s peak tapping season draws to an end. Expectations of a strengthening El Niño in Q4 have added to supply risks, as hotter and drier conditions in key producing countries such as Thailand and Indonesia could reduce latex yields.

Rubber decreased 5.2% to 236.9 USD Cents / Kg