Natural Rubber Price Levels Off

The price of natural rubber is finally starting to level off, after increasing 40 per cent in the last year. According to Deutsche Bank analysts, the price is now likely to level off at around US$2.8/kg, having risen to US$3.3/kg (RSS3 grade) by June 2008. "If natural rubber price follows recent drop of oil price, it could drop to US$2.6/kg (the average of the last 18 months)," the analysts observed. The news is likely to be greeted by a sigh of relief by tyre manufacturers who had been witnessing erosion in their operating profits due to increased raw material prices.