SunSirs: Natural rubber prices have fallen to their lowest level in four years

On March 18, Shanghai NR04, 05 contracts are broken down to 10 thousand. The dominated contract NR2005 was closed at 9965 points, down 315 points, 3.06%. 

Among them, the Shanghai NR 05 contract in four years for the first time broke 10,000, the lowest point 9930, and this price is also the lowest since January 2016, compared with the peak in 2020 13425 yuan/ton fell as much as 26%.

On March 19, Shanghai NR Contract decreased again, ending up in the lowest price at 9395 points, more than 800 points.

The natural rubber commodity index was 29.63 on March 19, down 0.45 point from yesterday, down 70.37% from the highest 100.00 point in the cycle (2011-Septmber-01), and up 5.26% from the lowest 28.15 point on November 25, 2015. 

China's natural rubber spot market closely followed the trend of the futures. 

On the morning of the 18th, Qingdao, Shanghai market, domestic rubber, 2018 domestic whole milk mainstream is reported at 10000-10100 RMB/ton. 

Imported rubber: 2018 Vietnam 3L mainstream quoted 10350-10450 RMB/ton.

2018 Thailand No.3 Hongmanli/Lianyi cigarette glue mainstream quoted 12400-12500 RMB/ton. 

Thailand Hopai raw material market film is 41 baht/kg.

Thailand sanyan piece is 43.2 baht/kg, field glue 38.3-38.5 baht/kg, cup glue 31.5 baht/kg

In the afternoon, the main contract fell below the 10,000 RMB mark, to 9,965 RMB/ton.

Most traders suspended quotation and shipment. On March 19, Shanghai NR contract again fell. All traders are suspended quotation and shipment.

Factor analysis

1. The recent global macro situation is severe, which has a great impact on all levels. Worries about the economic outlook lead to bearish commodity investment. 

2. Crude oil continued to drop sharply, which had a significant impact on the futures market. Most commodities followed the decline.

3. Before the Spring Festival, the social inventory has been in a high level. After the Spring Festival, the continuous imports of rubber to Hong Kong have been increasing, and the inventory has been accumulating. 

4. The current start of tire factory gradually increased, but under the current situation export orders are seriously affected, the demand side of the weak natural rubber pressure is obvious. To sum up, it can be seen that the multiple factors of macro environment and industry lead to the natural rubber to break the market for the first time since January 2016.

Future Forecast

On the supply, the domestic is still in the shutdown period. As for Yunnan region, due to drought powdery mildew, the subsequent output will be affected. 

Foreign orders after the Spring Festival in succession, storage pressure is greater.

In terms of demand, subject to the current situation of global spread, the reduction of foreign demand for rubber products seriously affects the export of rubber products in China. Although the operation rate of Chinese tire enterprises has increased significantly, the weak demand has a great impact on the production, and the downstream demand situation of natural rubber is very severe. It is expected that the global concern will continue in the short term after the market, we still need to pay close attention to the impact of the situation of foreign prevention and control on the export of rubber products.

At present, the domestic situation of prevention and control is good, and the recovery speed of production and circulation will be accelerated. In the short term to guard against the weak environment, the panic mood continues to play a role, resulting in a substantial price adjustment. In fact, the psychological support of the 10,000 RMB gate is obvious, the market around the price of repeated shocks are likely to be greater.

If you have any questions, please feel free to contact SunSirs with marketing@sunsirs.com.