Rubber prices remain stable, Thai floods make little impact

Recent flooding in Thailand has had less impact on natural rubber prices than may have been inspective. Deutsche Bank research shows that the impact on rubber supply has been “quite muted” and flooding around key plantations is not severe. As a result the spot price for natural rubber has reportedly continued its declining trend, hovering around US$4/kilo – a level last seen in March 2011.

At the same time China (the world’s largest rubber consumer) is reportedly building up its natural rubber stockpiles in order to take advantage of falling prices, and at the same time car sales in China have eased, calming demand. According to Deutsche Bank, this should help keep rubber prices well under control for the next few months at least: “Our commodities team project rubber prices to average at US$5/kilo in 2011, US$5.1/kilo in 2012 (revised downwards from the forecast [in August] of US$5.3/kilo) and US$4.5/kilo in 2013. The year-to-date average is US$4.9/kg.”

Looking forward to 2013, the market analysts reported, in an investor’s note dated 7 October, that they expect “significantly higher rubber production coming from Thailand in 2013”, which is also likely to have a calming affect on natural rubber prices.

Related news:

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• Analysts: Natural rubber prices to average $5.10/kg in 2012

• Tyre makers tipped to reap benefit of price rises, lower rubber costs in 2012