Global Commodities Alternative Data and Insights

Helixtap

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

Head of Content, Data & Research, Helixtap

Arusha Das

Head of Content, Data & Research

Commodities

<ul><li>Higher commodity prices fanned global inflation following the surge in demand post easing of Covid-19 has jeopardized the rubber market as it continued to confront supply bottlenecks and rising energy prices. It is a tight rope walk for the rubber industry now as, on the one hand, they are struggling with the volatile demand as the key rubber-producing nations deal with inconsistent production.</li><li>But, on the other hand, the concern of inflation is prompting the banks to raise interest rates coupled with supply chain disruption, which would limit the cash flow in the market is likely to weigh on the producer's margin.</li><li>Thus, all these factors would impact the market confidence adding pressure on the rubber prices.  However, a lot depends on how quickly the automotive sector returns to pre-COVID levels, while risks related to logistical issues persist on the supply side.How it started?Sooner than expected rebound in consumer demand chocked the supply side, which was already struggling with global transport network disruption hindered by government restrictions due to pandemic.Moreover, the freight costs impacted by higher oil prices have pushed up the landed cost of rubber, which elevated the cost of production of tires.</li></ul>

Higher commodity prices fanned global inflation following the surge in demand post easing of Covid-19 has jeopardized the rubber market as it continued to confront supply bottlenecks and rising energy prices. It is a tight rope walk for the rubber industry now as, on the one hand, they are struggling with the volatile demand as the key rubber-producing nations deal with inconsistent production.But, on the other hand, the concern of inflation is prompting the banks to raise interest rates coupled with supply chain disruption, which would limit the cash flow in the market is likely to weigh on the producer's margin.Thus, all these factors would impact the market confidence adding pressure on the rubber prices.  However, a lot depends on how quickly the automotive sector returns to pre-COVID levels, while risks related to logistical issues persist on the supply side.How it started?Sooner than expected rebound in consumer demand chocked the supply side, which was already struggling with global transport network disruption hindered by government restrictions due to pandemic.Moreover, the freight costs impacted by higher oil prices have pushed up the landed cost of rubber, which elevated the cost of production of tires.

Inflation Risks Triggers Anxiety As Supply Constraints Persist

Rubber Future SGX TSR20

Inflation Risks Triggers Anxiety As Supply Constraints Persist