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SunSirs: The Natural Rubber Market has shown Significant Gains after a Phased Increase
August 28 2023 10:44:33SunSirs(Selena)

Since the second half of the month, natural rubber has fluctuated and risen. The Shanghai Rubber 01 contract has been fluctuating and rising continuously from around 12,800 RMB/ton, and has continued to fluctuate slightly since reaching the price level around 13,200 RMB/ton. It is reported that the spot latex price in the Chinese market has increased, with an average increase of around 400-500 RMB/ton. Currently, Thailand imports latex barrels at around 10,700 RMB/ton, bulk at around 9,500 RMB/ton, Vietnam imports latex at around 8,700 RMB/ton, and domestically produced latex at around 8,700 RMB/ton.

According to the Commodity Market Analysis System of SunSirs, natural rubber, which has been at a low point in the market for a long time, has recently seen a slight fluctuation and upward trend. Since the second half of August, the spot rubber market in China has fluctuated from around 11,760 RMB/ton to around 11,930 RMB/ton, an increase of nearly 1.5%.

Influence Factor

1. Limited output and expected reduction in imports

On the supply side, in terms of new rubber production, firstly, during the peak season of global new rubber production, production areas are affected by more periodic rainfall, resulting in a decrease in domestic and international output. Secondly, the continuous decline in latex prices in the early stage suppressed the enthusiasm of rubber farmers to cut rubber; Once again, the rising cost of China's import exchange rate and inverted profits have led to a decrease in traders' imports, and the pressure on rubber imports has slowed down. In terms of inventory, the import volume decreased in August, resulting in a slowdown in the speed of spot inventory storage. The spot glue inventory in Qingdao Free Trade Zone is still at a high level, and the speed of dark glue unloading has increased.

2. Positive buying attitude is evident, and expectations for peak season increase

On the demand side, current rubber tire manufacturers are steadily scheduling production. The demand for tire foreign trade has increased, coupled with the continuous release of domestic travel and logistics industry demand, the consumption of automobiles and tires has continued to increase, and the operating rate of tire processing plants continues to be high. From the perspective of type, the operating rate of semi steel tires is high and relatively stable, while the production and sales pressure of all steel tires still exists, but the operating rate has increased significantly. In the second half of the month, the natural rubber market has shown an upward trend, with a clear sentiment of "buying up rather than buying down" in market procurement. In addition, the traditional peak season is approaching, and the national policies and measures to promote automobile consumption are frequent. Tire companies have a certain stock demand. In addition, end consumption has started to warm up, and downstream demand for latex products has also started to rise. The natural rubber procurement end is more active than in the previous stage.

3. Further transmission of rotational storage news enhances market atmosphere

On the news side, in the second half of the month, there was another round of storage news in the market, causing a brief increase in bullish sentiment during the period, which also led to a volatile and upward trend in the natural rubber market. The recent investment atmosphere in the rubber market has improved.

The current natural rubber market has been at a low level for many years, with limited downward space. Combined with the relative slowdown in foreign rubber imports, high operating levels of tire companies, and the upcoming peak season of consumption in the Golden Nine Silver Ten, the natural rubber market has obvious positive support. Analysis suggests that natural rubber may experience a volatile upward trend in the future market.


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