According to Singapore's news on May 8, as rubber prices continue to rebound moderately, Chinese buyers this week chose rubber shipments to stimulate market sentiment. China's buying will help alleviate fears of a slowdown in demand in the world's largest rubber consumer. Demand concerns, combined with excess supply, led to the decline of TOCOM glue last year to its lowest level since 2009.

Large rubber manufacturers in Asia, including the world's largest rubber merchant Shidong, have joined forces to push up rubber prices by a large margin and abandon the pricing system that closely follows the Singapore Merchandise Exchange (SICOM) index. From the second half of 2015, these rubber dealers will charge much higher price than the price of SICOM rubber, which indicates that the rubber industry is undergoing drastic changes, before the price drop has hit rubber farmers seriously. This also contributes to the recent rise in rubber prices.

A trader in Jakarta said it was a long time ago that Chinese buyers suddenly appeared in the Indonesian market. They buy thousands of tons of rubber.

He added that a Chinese buyer had purchased 20 containers from a manufacturer alone. But the presence of Chinese buyers has also confused the market, and producers are uncertain about whether these purchases will last.

This week, the Indonesian tire grade standard rubber SIR20 shipped in July traded at $1.56 per kilogram, up from $1.49 last week.

The Shanghai glue contract jumped to a nine-month high this week, although some of the gains were subsequently reversed. Traders note that China's trading activities on the Singapore Commodity Exchange (SICOM) are becoming more frequent. A Singaporean trader said that Chinese TRADERS'enthusiasm for SICOM's participation has increased dramatically, and they may hoard inventories before producers can cut back on supply.

Indonesian and Thai manufacturers said last month that they would no longer deliver rubber to the Singapore Commodity Exchange (SICOM) from the second half of this year, but negotiate directly with consumers to get rid of brokerage links. The market also keeps an eye on the further actions taken by these rubber-producing countries to boost prices.

On May 7-8, the Association of Natural Rubber Producers (ANRPC) held an executive committee meeting in Malaysia to discuss the long-term stability of rubber prices and other issues.

At the same time, rubber factories are still facing a shortage of raw materials. Another trader in Indonesia said that we could not buy enough raw materials for the factory. Because the price of rubber is still at a low level, rubber cutters are reluctant to sell. In addition, as prices continued to decline last year, many rubber farmers stopped cutting rubber.