South east Asia’s main natural rubber producing countries, including Thailand and Indonesia, plan to change the way they price the commodity – by ditching the current pricing peg to Singapore’s SICOM commodity exchange.
The price of natural rubber, a commodity most commonly used in automotive tyres, as quoted on the SICOM exchange has fallen dramatically in the last few years, since peaking at over US$2.70/pound in early 2011.
Go deeper with GlobalData
Producers in the region are now preparing to charge more for this labour intensive commodity and will also cut output to support higher prices in the future. They claim the commodity is currently priced at way below the cost of production.
Any increase inevitably will have a significant impact on future input costs for tyre and automotive rubber component manufacturers.
