RU2105 Dropped 3,465 Points in March and Created This Year's New Low
As of now, the lowest price of RU2105, the most traded natural rubber futures contract on the SHFE, has reached 13,870 points, down 3,465 points or 24.98% from the highest point of 17,335 in February, which has offset all the price rise seen after China’s Lunar New Year ended and has created a new low year-to-date. This paper will introduce a variety of factors leading to such a significant drop in Shanghai natural rubber futures.
Reasonable pullback after an unexpected price rise
The end of China’s Lunar New Year started a bull commodity market. The commodity prices, represented by the crude oil price, rose significantly. The market co-movement also drove the rubber price to rise. However, since the 4th quarter of last year, the rubber market had been lukewarm even amid the bullish atmosphere in the commodity markets, and RU2105 price had been hovering in the range of RMB 14,000-15,000/mt.
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