Rubber

The elastic latex of tires, grown in Southeast Asia and hedged in Tokyo and Shanghai.

Overview

Natural rubber comes from tapping hevea trees, Thailand the top producer, with Indonesia, Vietnam, and Malaysia following, smallholders dominating. Trees take about seven years before tapping, so supply answers booms slowly. Tokyo and Shanghai trade futures and Singapore prices technical specified rubber. Tires take most of demand, so auto sales and freight read directly into price, and synthetic rubber made from butadiene caps rallies through substitution. La Nina dryness and tapping labor migration swing flow, Thai floods lifted prices in 2011 as the bubble peaked above 6 dollars a kilogram, and a decade of gluts followed as the trees planted during the boom matured.