Analysis of NR Industry's Seasonal Characteristics
– Probability of Price Rise and Drop
Natural rubber is a product with financial feature, and its price changes are affected by the co-movement among the commodity markets and the capital flow as well as its fundamentals. A factor can affect the market and price at different stages in different ways. Does the natural rubber price have seasonality?
In normal times, off-season low output will lead to a rising of price, and the peak-season high output will force down the price. The price change will depend on the seasonal change of output. However, the fact is that the natural rubber price change is more likely to be affected by other factors, such as the macro sentiment, co-movement among the commodity markets, market expectation, risk preference, capital flow, and the co-movement of related products.
The correlation coefficient between Shanghai SCRWF price and futures price is above 95%. Thus, this paper will analyze the seasonality of natural rubber price since 2016 by using SCRWF price in Shanghai market as an example.
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