SunSirs: China Domestic Natural Rubber Market Fell and Rose at a Low Ebb in Early September

According to the monitoring of SunSirs, the natural rubber commodity index on September 14 was 35.46, up 0.17 points from the previous day, down 64.54% from the highest point of 100.00 (2011-09-01) in the cycle, and up 29.99% from the lowest point of 27.28 on April 2, 2020. (Note: Period refers to 2011-09-01 to now)

SunSirs monitoring shows that in the first half of September, the domestic natural rubber (standard 1) market in the East China market fell first and then rose: on September 1, the main report in the East China market was about 11,810 RMB/ ton, and on September 14, the main report was 11,956 RMB/ ton. Since the spot price fell below the 12,000 RMB/ ton barrier again last week to the lowest of 11,706 RMB/ ton, the natural rubber has rebounded technically for two consecutive days on September 12 and 13. Since September, the highest price was 11956 RMB/ ton on the 14th, and the lowest price was 11,706 RMB/ ton on September 9, with the maximum amplitude of 2.14%. According to the data of SunSirs, the main spot market of natural rubber in East China (Hainan Island) has dropped by more than 13% since the beginning of 2022, 13,748 RMB/ ton. The price on September 9, 11,706 RMB/ ton, has fallen above the low price of 11,910 RMB/ ton on July 22. Although it is currently in the traditional peak sales season, the natural rubber market is still at the annual low point under the situation of weak industrial supply and demand.

Macro: In August, the trend of international crude oil futures was similar to that of "W". In particular, it rose about 10% from August 17 to 25. Near the end of the month, it fell slightly, then rose, and then fell sharply. On September 13, the international crude oil futures closed lower. The settlement price of the main contract of the U.S. WTI crude oil futures was 87.31 dollars/barrel, down 0.47 dollars or 0.5%; The settlement price of the main contract of Brent crude oil futures was 93.17 dollars/barrel, down 0.83 dollars or 0.9%. The economic data released by the US Department of Labor on Tuesday showed that the CPI was higher than expected. Affected by the expectation of the Federal Reserve's possible radical interest rate increase, the stock market and bulk commodities fell sharply, and WTI crude oil fell to 85 dollars at one time. However, as the market is generally worried about the tight supply in the future, the oil price has recovered most of the decline by the end of the day.

Industry analysis: according to the data from the business community, the spot market of natural rubber in East China (Hainan Island) on September 14 was 11,956 RMB/ ton, up 0.47% from the previous trading day and down 6.19% year on year. It just experienced the lowest level of this year (11,706 RMB/ ton on September 9). Natural rubber rebounded slightly and was at the annual market trough. Macroscopically, the economy should be stabilized in policy; Since the end of last month, the crude oil has continued to fall in shock, and the range has exceeded 12%. On the supply side, it is the peak season for sales. However, from the perspective of the natural rubber industry, although there are disaster reports in some parts of Southeast Asia, the impact on the rubber price is not significant, nor is there a major typhoon in the main production areas in China. The seasonal supply season is at home and abroad, and the impact of public health events on the export of natural rubber is not as obvious as last year. It is reported that the price of glue produced at home and abroad has temporarily stabilized recently. On the demand side, the supply pressure of downstream tire enterprises is still high, the demand for tires continues to be light, and some tire production lines are stopped for maintenance; In terms of replacement rubber, the price of cis polybutadiene rubber continues to be high, while that of styrene butadiene rubber continues to fluctuate and decline. At present, the price is close to that of natural rubber, which will promote the purchase demand of natural rubber to some extent; From the perspective of passenger car sales, according to the Passenger Association, the retail sales of passenger cars in August 2022 will reach 1.871 million, with a year-on-year growth of 28.9%, the highest growth rate in the past 10 years; Retail sales grew 2.9% month on month in August, which was the second lowest month on month growth in the same period of nearly 10 years. The accumulated retail sales from January to August were 12.95 million, up 0.1% year on year and 13,000 vehicles year on year. The increase of 1.102 million vehicles from June to August made a huge contribution, which gave confidence to the market.

In the comparison of strong supply pressure and a positive sales volume of passenger cars, we initially believe that the possibility of a sharp decline in natural rubber in the short term is not high. However, in the absence of a significant improvement in downstream demand and the impact of extreme weather on the supply side, the possibility of a significant rise in natural rubber is also low, and the probability will remain volatile.

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