April and May were months with a clearly upward trend. June corrected much of the increase.
In July, stability was the norm. Beyond the usual fluctuations, there was no clear trend in any direction.
In a month without major developments, this stability is the result of two opposing forces. Supply, although it has emerged from its low point, remains at low levels, which puts upward pressure on prices. Demand shows signs of weakness, especially due to poor results in China. As a result of these two factors, the market has yet to find a clear trend.
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China showed poor indicators of industrial activity and also in the construction sector. The poor performance of the world’s largest rubber importer generated pessimism among investors and led to speculation of a price decline. This effect predominated during the first weeks of the month.
Toward the end of July and the beginning of August, this was offset by a deterioration in production conditions. The supply of natural rubber had been steadily improving since June, but, as we have mentioned, remains at historically low levels. The weather favored the recovery and led to a drop in prices until mid-month. However, in recent weeks, supply was interrupted by heavy rains in Southeast Asia. As a result, prices rebounded slightly.
Currently, the balance of these two forces is even. In the very short term, supply issues continue to prevail, so most analysts expect (without taking too much risk) a moderate increase in prices for August. However, in the medium term, we still don’t see any very defined trend.