Output Disruption in China, Tocom Rubber Prices Rebound

Rubber prices on the Tokyo commodity exchange were able to rebound at the end of trading today, Wednesday (05/15/2019).

Based on Bloomberg data, rubber prices for the most active contract in October 2019 at the Tokyo Commodity Exchange (Tocom) closed up 0.05 percent or 0.1 point to 186 yen per kilogram (kg).

Previously, rubber prices had opened in the red zone with a decline of 0.54 percent or 1 point to 184.90 yen per kg. As for the trade on Tuesday (5/14), rubber prices closed down 0.75 percent or 1.4 points to 185.90.

On the other hand, rubber prices at the Shanghai Futures Exchange for the most active contract in September 2019 also closed down 0.68 percent or 80 points to 11,645 yuan per ton, after opening in the red zone with a decline of 1.24 percent or 145 points to 11,580 yuan per ton.

In Tuesday’s trade, Shanghai rubber prices closed down 85 points or 0.72 percent to 11,725 ​​yuan per ton.

Although unable to end higher, rubber futures prices in Shanghai were able to erode weakness as the focus shifted from the trade war to supply concerns following news that production at China’s largest rubber plantation had stalled.

Reported by Bloomberg, the largest plantation in China, Jiangcheng Rubber, suspended tapping activity on Monday because hot temperatures worsened work conditions and triggered the danger of pests, according to a statement on the WeChat official plantation account.

China is an influential natural rubber producer, with output of around 800,000 tons in 2016, although it is a much larger importer, according to the Association of Natural Rubber Producing Countries. Disruptions in local supply can cause an increase in imports.