Factors that Affects the Rubber Price 

What dominates and plays roles in rubber price determination each day. 

Listed are some general factors that support the uptrend of rubber price.  The downtrend would happen when it comes to the reverse effect of the same.
 

1. Oil price change

By all means, oil price nearly affects everything in the world.  Its by-product is also used as one of the main content to produce Synthetic Rubber.  As Synthetic Rubber (SR) is a perfect substitute goods of Natural Rubber (NR), oil price increase, SR price increases, and then NR price also increases.
 

2. Hedge Fund manipulation

Rubber Hedge Fund plays a critical rule in rubber price domination at present.   They are external hedge funds, buyer hedge funds and also seller hedge funds.  In 2007, it quite proves that the technical force had overpowered the fundamental force as we see the reverse effect upon the seasonal index all year long.  When Hedge Fund decides to support the price, it is most likely that the rubber price shows the firm situation.  Also the financial movement to/from capital investment from/to commodity investment reveals the price figure adjustment.
 

3. Rubber stock at Sellers’ side

I mean the Sellers as the Growers. This may mean the current seasonal index in annual round.  By nature, rubber trees stop yielding latex produce around end of February until early of June.  It causes the aggregate rubber volume in the central market to be fewer.  This situation tends to push the rubber market price to be in upward trend during the close of rubber season.  The expectation of sellers is also put into condition where the sellers hold the last stock for expectant high price to sell during the close of season. 
 

4. Rubber stock at Buyers’ side

When the big buyers like China keeps collecting rubber stock in expect of future price buffer, it may control the price at low level for some certain time.  Big buyers are China, Japan and the U.S.  The special demand for rubber usage from Big buyers also counts.  Olympics Games 2008 in Beijing, China leads to outburst of economic boost which results in high level production of goods.  Tyres and rubber-related goods are heavily produced to respond to this occurrence of economic boom.
 

5. Nature Influence

Commodities are goods that are directly affected by nature touch.  Low production of rubber during the close of rubber season is correlated to higher level of price.  The South of Thailand is characterized by frequent storms and heavy rains and floods during the rainy season.  Each raining may also affect the price sways on a weekly basis.  El Ninos and La Ninas causes abrupt and unpredictable changes in seasonal cycle.  Global warming seems to effect longer period of rubber close of season during summer. 
 

Signs that convey price significance :
 

Rubber Price will be higher, when
-         Yen depreciated
-         Baht depreciated
-         Higher Oil price
-         Higher Gold price
-         Flooding and heavy raining in Growing areas
-         Stock markets boom
-         Big Three Buyers’ Interest rate down
-         Big Three Buyers’ Economic growth
-         Fewer rubber stock
-         Hedge Funds price support 

Rubber Price will be lower, when
-         Yen appreciated
-         Baht appreciated
-         Lower Oil price
-         Lower Gold price
-         Big Three Buyers slow down the purchase
-         Hedge Funds move to invest in Gold and Oil
-         Big Stock markets fall