Rubber prices enter ‘bull market’, tyre makers will be affected
Rubber prices are entering a “bull market” as futures hit a three-month high following indications that China's economy is likely to demand more rubber for tyres. According to a Bloomberg report, rubber for delivery in January advanced as much as 3.2 per cent to 278 yen a kilogramme (2,817 a metric tonne) on the Tokyo Commodity Exchange, 22 per cent up from this year’s lowest close.
With increased oil prices caused by tensions in the Middle East it doesn’t make any difference whether we are talking about natural or Synthetic rubber. The end result will be increased prices for the tyre manufacturers and therefore increased tyre prices from the manufacturers into the markets.
“Rubber resumed a rally as optimism grew that Europe’s economy may solidify its recovery and the Chinese growth may be accelerating, leading to an expansion in demand,” said Kazuhiko Saito, chief analyst at broker Fujitomi Co in Tokyo.
China accounts for 33 per cent of global demand and tyres represent 70 per cent of natural-rubber consumption in the country, according to estimates from the Qingdao International Rubber Exchange Market.