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Rubber prices seen stabilising next year

COLOMBO, Oct 28, 2014 (EconomyNext) – Global natural rubber prices, which have fallen steeply in recent months, should stabilise early next year, speakers told the 4th Global Rubber Conference held in Colombo.

The fall was partly owing to the strengthening of the US dollar in which most commodity prices are quoted, they said.

Prachaya Jumpasut, Managing Director of the UK consultancy Rubber Economist, said he expects rubber consumption to rise in Asia in 2015.

"In just 10 years the regional distribution of the rubber industry has changed a lot with the share of North America and Europe getting smaller and a larger share for Asia. Natural rubber (NR) consumption in China should increase in 2015."

He said the "hangover of stocks" and bad weather is holding global NR output down.

"Prices of NR have fallen the sharpest among commodities," Jumpasut said. "But they should stabilise at a lower level in the next year or so."

Dar Wong, a Singapore-based trader, also said he expects NR prices to recover next year.
Wong, Director and Investment Strategist, Dektos Investment Corporation, a fund manager, said the NR market is cyclical.

"In the first half of 2014 rubber prices came down from 2.26 US dollars to 1.64 dollars because the US dollar is going up," he said.

Demand is expected to pick up in China, one of the biggest rubber markets in the world, next year.

NR prices may dip again in the next 2-3 months but then bottom out and recover thereafter, he said.





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