Rubber’s impending bounce

Overview

After more than three years of steadily increasing prices on the back of burgeoning demand from emerging markets, prices for natural rubber have fallen sharply in recent weeks, like those of other commodities. Commentators have attributed this to weaker economic growth and to lower oil prices – which theoretically should favour synthetic rubber over natural rubber.

The common explanations for the reversal in the rubber market do not tell the whole story, however. Our trusted sources...