Head of Content, Data & Research, Helixtap

Arusha Das

Head of Content, Data & Research

Global Commodities Alternative Data and Insights

Helixtap

Helixtap collects, processes and distributes proprietary data, analyses and forecasts for the rubber, latex and automotive markets

Commodities

<ul><li>An extensive lockdown in Shanghai reignited the concerns in the rubber industry for a renewed disruption to global supply chains, which is already under duress by the pandemic and the Russia-Ukraine conflict. “There are reports of some companies like DHL needs to quarantine shipping docs upon arrival in China for 11 days.</li><li>Now, that is a real mess with demurrages piling up,” said a market source. China has implemented a two-phase partial lockdown for ten days, starting March 25 in Pudong financial district and nearby.</li><li>The second phase of the lockdown would close the downtown area west of the Huangpu River. The rubber market saw some caution amid the buyers.</li></ul>

An extensive lockdown in Shanghai reignited the concerns in the rubber industry for a renewed disruption to global supply chains, which is already under duress by the pandemic and the Russia-Ukraine conflict. “There are reports of some companies like DHL needs to quarantine shipping docs upon arrival in China for 11 days.Now, that is a real mess with demurrages piling up,” said a market source. China has implemented a two-phase partial lockdown for ten days, starting March 25 in Pudong financial district and nearby.The second phase of the lockdown would close the downtown area west of the Huangpu River. The rubber market saw some caution amid the buyers.

Renewed Risks On Global Supply Chain As China Locks Down

CEO, Helixtap

Farah Miller

<ul><li>ASEAN reliant US rubber buyers are witnessing a setback as an aftermath of the ongoing Russia and Ukraine conflict.</li><li>The supply chain disruptions, compounded by shipping container shortages, have thrown the end-users of natural rubber, especially the tire manufacturers, into a tailspin. With about 90% of natural rubber production in Southeast Asia, container shortages and clogged ports have made shipping raw material to the US difficult.</li><li>The US imported US$6.35 billion worth of plastic and rubber products in January, up by around 2% in December 2021, as per industry reports. With Russian forces cutting off shipping routes, logistics firms call off services while the air freight rates shot up.</li></ul>

ASEAN reliant US rubber buyers are witnessing a setback as an aftermath of the ongoing Russia and Ukraine conflict.The supply chain disruptions, compounded by shipping container shortages, have thrown the end-users of natural rubber, especially the tire manufacturers, into a tailspin. With about 90% of natural rubber production in Southeast Asia, container shortages and clogged ports have made shipping raw material to the US difficult.The US imported US$6.35 billion worth of plastic and rubber products in January, up by around 2% in December 2021, as per industry reports. With Russian forces cutting off shipping routes, logistics firms call off services while the air freight rates shot up.

<ul><li>A multitude of shocks caused by disruptive events ranging from the Covid-19 pandemic to geopolitics, with the ongoing war in Ukraine, has put the global supply chain in a fragile spot.</li><li>Moreover, given ASEAN-dominated rubber production, the supply chain snags have caused backups in the outflows weighing demand and prices. As the rubber industry navigates through these changes, one needs to think beyond product costs and supplier choices, especially with inflation and supply shortages are expected to continue.</li><li>It becomes imperative to look into the situation more objectively as the impact of the recent sanctions of Russia ripples into the market. Rubber sees the reverse reaction Given Russia's limited presence in natural rubber production, the rubber supply was insulated from the impacts of sanctions.</li></ul>

A multitude of shocks caused by disruptive events ranging from the Covid-19 pandemic to geopolitics, with the ongoing war in Ukraine, has put the global supply chain in a fragile spot.Moreover, given ASEAN-dominated rubber production, the supply chain snags have caused backups in the outflows weighing demand and prices. As the rubber industry navigates through these changes, one needs to think beyond product costs and supplier choices, especially with inflation and supply shortages are expected to continue.It becomes imperative to look into the situation more objectively as the impact of the recent sanctions of Russia ripples into the market. Rubber sees the reverse reaction Given Russia's limited presence in natural rubber production, the rubber supply was insulated from the impacts of sanctions.

Supply Chain Snags Seen Stretching Through 2022 – Is Rubber In Trouble?

<ul><li>The Indian government's move to introduce new rubber legislation to update the functioning of the domestic rubber industry and the rubber board triggered apprehensions among market participants and experts as it might undermine the position of the farmers and the Rubber Board. Given the bill is implemented, the rubber farmers would be given the industrialist status as the Rubber sector gets industry status.</li><li>As a result, Central Government would be responsible for setting up the floor and ceiling price, limiting the Rubber Board's authority over price settlement.  Meanwhile, according to industry reports, the bill's implementation might be detrimental for the farmers as a ceiling price will help downstream industries like tire manufacturers more than the rubber farmers.</li><li>For instance, it might limit the farmers to benefit from the surge in the international rubber prices as the bill provisions for the government to put a ceiling on domestic prices.</li></ul>

The Indian government's move to introduce new rubber legislation to update the functioning of the domestic rubber industry and the rubber board triggered apprehensions among market participants and experts as it might undermine the position of the farmers and the Rubber Board. Given the bill is implemented, the rubber farmers would be given the industrialist status as the Rubber sector gets industry status.As a result, Central Government would be responsible for setting up the floor and ceiling price, limiting the Rubber Board's authority over price settlement.  Meanwhile, according to industry reports, the bill's implementation might be detrimental for the farmers as a ceiling price will help downstream industries like tire manufacturers more than the rubber farmers.For instance, it might limit the farmers to benefit from the surge in the international rubber prices as the bill provisions for the government to put a ceiling on domestic prices.

New Indian Rubber Bill Triggers Apprehension, Might Weigh On Producers

<ul><li>Malaysian rubber production & exports rebound in Jan  The Malaysian rubber market rebounded in January 2022, supported by an uptick in global manufacturing activities, some global rubber supply shortage, surging crude prices, and a weak ringgit against the US dollar. Natural rubber production increased by 17.7% in January 2022 to 49,087 tons, from 41,690 tons in December 2021, while year-on-year production clocked a rise of 7.3%.</li><li>However, the contribution of smallholders dropped to 89.1%, down from 91% in December, while the estates contributed about 10.9% in January 2022.  The rubber inventory increased by 8.7% to 310,052 tons in January 2022, with rubber processors’ factories contributing 92.3%, followed by rubber consumers factories at 7.6% and rubber estates. Source: DSOM & Helixtap Standard Malaysian Rubber (SMR) 20 prices saw a rise of around 5% over January, given the supply shortage due to some disruption in tapping activities in Thailand, according to Helixtap data.</li><li>As a result, SMR 20 closed the month of January at US$1850/mt on FOB basis.</li></ul>

Malaysian rubber production & exports rebound in Jan  The Malaysian rubber market rebounded in January 2022, supported by an uptick in global manufacturing activities, some global rubber supply shortage, surging crude prices, and a weak ringgit against the US dollar. Natural rubber production increased by 17.7% in January 2022 to 49,087 tons, from 41,690 tons in December 2021, while year-on-year production clocked a rise of 7.3%.However, the contribution of smallholders dropped to 89.1%, down from 91% in December, while the estates contributed about 10.9% in January 2022.  The rubber inventory increased by 8.7% to 310,052 tons in January 2022, with rubber processors’ factories contributing 92.3%, followed by rubber consumers factories at 7.6% and rubber estates. Source: DSOM & Helixtap Standard Malaysian Rubber (SMR) 20 prices saw a rise of around 5% over January, given the supply shortage due to some disruption in tapping activities in Thailand, according to Helixtap data.As a result, SMR 20 closed the month of January at US$1850/mt on FOB basis.

Malaysian Rubber Production & Exports Rebound In Jan

Singapore

SGX Technically Specified Rubber 20 (TSR20) Futures: Effective from 16th May 2011, this contract will be migrated from SICOM platform to the SGX-DT platform. It will cease trading on SICOM at the close of business day Friday, 13th May 2011. Trading hours are revised as 7.55am to 6.00pm (no lunch break). Please refer to SGX products website for the new revised contract specifications. Exchange symbol: TF. Product Specifications: https://www2.sgx.com/derivatives/products/sicom-rubber?cc=TF

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Rubber Future SGX TSR20 (ORA COMDTY)

Renewed Risks On Global Supply Chain As China Locks Down

An extensive lockdown in Shanghai reignited the concerns in the rubber industry for a renewed disruption to global supply chains, which is already...

Helixtap

Supply Chain Woes Plague US Tire Makers

ASEAN reliant US rubber buyers are witnessing a setback as an aftermath of the ongoing Russia and Ukraine conflict. The supply chain disruptions,...

Helixtap

Supply Chain Snags Seen Stretching Through 2022 – Is Rubber In Trouble?

A multitude of shocks caused by disruptive events ranging from the Covid-19 pandemic to geopolitics, with the ongoing war in Ukraine, has put the...

Helixtap

New Indian Rubber Bill Triggers Apprehension, Might Weigh On Producers

The Indian government's move to introduce new rubber legislation to update the functioning of the domestic rubber industry and the rubber board...

Helixtap

Malaysian Rubber Production & Exports Rebound In Jan

The Malaysian rubber market rebounded in January 2022, supported by an uptick in global manufacturing activities, some global rubber supply...

Helixtap

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52-week Range

Market Cap (USDm)

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