Rubber futures hover near 2-week high on oil support
Rubber futures rose to around 222 US cents/kg in mid-August, near a two-week high, helped by higher oil prices but capped by stronger Malaysia supply prospects and softer China auto demand.
Rubber futures rose to around 222 US cents per kilogram in mid-August, near a two-week high, as higher oil prices supported natural rubber by making crude-based synthetic rubber less competitive.
However, gains were capped by improving supply prospects, with Malaysia’s natural rubber production jumping 31.5% month-on-month in June.
The increase reflected the peak harvesting season, which typically runs from June through September.
China remained the largest destination for Malaysian natural rubber exports, accounting for 55.8% of total shipments, highlighting its importance to regional demand.
Still, weaker Chinese auto demand continued to weigh on the outlook, with subdued tyre demand and elevated vehicle inventories.
Meanwhile, longer-term supply concerns offered support, as Indonesia, the world’s second-largest rubber producer, saw farmers increasingly switch from rubber to palm oil, reducing production capacity and potentially tightening global supplies.