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SunSirs: Natural Rubber Decreased More Than 10% On March

April 03 2020 10:36:45     SunSirs (Daisy)

SunSirs (100ppi.com) data shows that on March 31 natural rubber commodity index is 27.67, up 0.12 points from yesterday, from the cycle peak 100.00 points (2011-Septmber-01) down 72.33%, from the low of 27.55 points on March 30, 2020 up 0.44% (Note: Period refers to 2011-Septmber-01 till now). 

SunSirs monitors that the east China region natural rubber 18 years treasure island whole milk mainstream quotation on March 1 was 10400 RMB/ton. 30-day price was 9200 RMB/ton or so. This month the market price falls by 1300 RMB/ton, and the decline reaches 10.67%.

  According to the data of the last period, the main contract of Shanghai glue broke ten thousand on March 18, 2020, and the contract of Shanghai glue is still in fluctuation. The lowest price on March 27th intraday was 9,300 RMB/ton, which has fallen below the low of 9,350 RMB/ton set by Shanghai glue on November 30, 2015. And 30-day Shanghai glue intraday the lowest price of 9115 RMB/ton, once again a new low price. When looking back at the historical trend, the low level of Shanghai glue is 8715 RMB/ton on December 31, 2008.

Supply: Currently in the off-season, domestic drought and powdery mildew affect the expected reduction of yield. Rubber producing countries in southeast Asia were significantly affected by the outbreak. On March 18th the port of Penang in Malaysia was closed to Thai goods. "City closure" measures under Malaysia's domestic high inventory pressure is huge. Malaysia's "closure" will probably lead to a direct reduction in Chinese imports from Malaysia of about 30,000 to 35,000 tons. In addition, the "closure" of the domestic rubber processing plant in Malaysia is basically in a state of suspension, which will significantly reduce the import demand of concentrated latex and African rubber raw materials from Thailand, affecting the export volume of Thailand will be about 40,000 tons. And Thailand is in an emergency allocation of ports in Thailand, the price of raw rubber in Thailand fell, among which the price of cup glue is the lowest since records began.

Inventory: Data show that as of March 27, the warehouse receipt inventory of the previous stock exchange is at a low level in the same period, but the inventory of imported rubber has been accumulated after the New Year. It is said that the inventory at the spot end of natural rubber in Qingdao free trade zone is high and the pressure is high. 

As of March 27, the natural rubber stocks of the previous period were 242,467 tons, down 1907 tons from February 28, and futures stocks were 236,670 tons, down 1,730 tons from February 28 and 184,750 tons from the same period in 2019. The last energy no. 20 rubber inventory was 73,829 tons, up 11,917 tons from February 28, and the futures inventory was 53,545 tons, up 9,777 tons from February 28. The total natural rubber inventory in Qingdao free trade zone is 753,400 tons. Among them, the bonded area inventory is 188,000 tons, general trade inventory 565,400 tons.

Import and Export: China imported 840,200 tons of natural rubber (including latex and mixed rubber) between January and February 2020, up 5.03% from the same period in 2019, according to customs data. Between January and February in 2020, China's import standard was 223,100 tons, an increase of 39,600 tons compared with the same period in 2019. 23,300 tons of imported cigarette glue, an increase of 0.01 million tons compared with the same period in 2019. And there is 526,900 tons of imported mixed rubber, an increase of 21,100 tons over the same period in 2019. The import of composite adhesive was 8,900 tons, down by 4,600 tons compared with the same period in 2019.

Demand: First of all, the demand of tire enterprises greatly reduced. In March, domestic tire enterprises returned to work and production steadily. At first, the situation of domestic epidemic control was good, and the enterprise was positive. Later, the situation of rapid spread abroad had a huge impact on the downstream orders. 

Second, replace glue cost downward glue put pressure on day. The current international crude oil tumbled, with very direct effects on the chemical industry chain of goods. Natural rubber butadiene cost caused by crude oil fell down cost, dragging synthetic rubber, then because of some synthetic rubber can replace natural rubber in tire plant production, lead to low natural rubber prices down.

Policy: On March 17, the ministry of finance and the state administration of taxation issued the announcement on raising the export rebate rate of some products, saying that from March 20, 2020, the export rebate rate of 1084 products will be raised to 13%. We will raise the export tax rebate rate on 380 items to 9%. The export rebate rate of synthetic rubber will be increased from 10% to 13% to encourage the export of synthetic rubber. But the microscopical environment is not good, the downstream demand is serious under the influence of shrinking, the synthetic rubber export pressure is obvious.

Market Forecast: SunSirs natural rubber analysts believe that the current natural rubber is in the cut off period, the supply of heart glue is limited. The special situation of production of rubber and other prevention and control measures led to the natural rubber supply chain blocked, downstream demand is weak, orders seriously shrinking, and the existing inventory is high. It is expected that natural rubber remains under pressure.

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