By Miles Moore, Senior Washington Reporter
WASHINGTON (Feb. 13, 2014) — Natural rubber (NR) prices have reached their lowest levels on Asian markets since late 2009, prompting concerns that China, the world’s largest NR consumer, faces a slowing economy.
However, sources in the rubber trade said they believed other factors were at work regarding NR prices and suggested the current dip may not be of long duration.
Data from the Tokyo Commodity Exchange Jan. 8 showed rubber futures at 256.1 yen ($2.46) per kilogram, up 2.1 yen from the two-month low posted the day before.
On the Singapore Commodity Exchange, meanwhile, futures for Rubber Smoked Sheets 3 stood at 236.5 cents per kilo on Jan. 8, up a fraction from the previous day but down from the 253 posted on Dec. 27. The Jan. 8 price for Technically Specified Rubber 20—the grade of rubber used for tire manufacturing—was priced at 218.7 cents per kilo, compared with 218.5 on Jan. 7 and 229.5 on Dec. 27.
News reports on Jan. 6 placed Chinese NR stockpiles at a nine-year high, which contributed to fears that the Chinese economy is weakening.
“The Chinese economy has been off, and current (NR) prices are a little bit of a red flag for me,” said an industry source who asked to remain anonymous. “We’ll see an economic slowdown in China. But I also think the U.S. economy is back, and we are a horrendous consumer of things. Furthermore, a lot of the things the U.S. consumes come from China.
“I always feel that China gets the best of us,” the source said. “Things will be quiet for a while, then they start buying up everything.”
Greg Jagt, vice president of trading at Astlett Rubber Inc. in Oakville, Ontario, noted that the Shanghai futures market seemed to be falling faster than most other markets. He also said, however, that Vietnam, one of China’s largest NR suppliers, had increased NR production 14 percent in 2013 and seemed poised to raise production still further.
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Titan International and the United Steelworkers union have petitioned the U.S. International Trade Commission and U.S. Department of Commerce seeking relief from OTR tire imports from China, India and Sri Lanka. What’s your opinion?
|I wholeheartedly support their action – something needs to be done.||
|I think it’s a bad idea that could inevitably tie the hands of domestic tire makers.||
|I oppose any duties against tire importers—they only raise costs for distributors and make it harder to obtain inventory.||
|I’m kind of on the fence and not sure what’s right, but need more information before deciding.||
|I don’t really care whether or not relief is granted.||
|Total votes: 78|