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SunSirs: Futures Prices have Fallen from High Levels, China Natural Rubber Prices have Fluctuated widely
November 24 2023 10:44:38SunSirs(Selena)

According to the Commodity Market Analysis System of SunSirs, the recent trend of domestic natural rubber has fluctuated widely. The spot rubber market in China was around 13,070 RMB/ton on November 22 and 12,970 RMB/ton on November 13, an increase of 0.77%.

Recently, the high level of natural rubber has fallen, and the Shanghai Rubber 01 contract has continuously fluctuated from around 14,600 RMB/ton to 13,900 RMB/ton. Currently, Thailand imports latex barrels at around 11,600 RMB/ton, bulk at around 10,400 RMB/ton, Vietnam imports latex bulk at around 9,600-9,800 RMB/ton, and domestically produced latex bulk at around 9,600 RMB/ton.

Influencing factors:

1. Rainfall in domestic and foreign production areas has eased, and raw material supply may increase

On the supply side, with reduced rainfall in Thailand, Vietnam, and domestic Hainan production areas, the expected increase in raw material supply has led to weak and stable prices for raw material purchases. The domestic Yunnan production areas will gradually enter a period of cutting cessation, and the performance of raw material purchase prices will be strong. With the arrival of winter, the enthusiasm of processing plants for rubber collection and production has increased, supporting the natural rubber market. As of November 19, 2023, the total inventory of Tianjiao Bonded and General Trade in Qingdao area was 714,300 tons, a decrease of 9,100 tons compared to the previous period and a decrease of 1.27% month on month. The Qingdao Free Trade Zone continues to destock, and the overall inventory destocking rate has slowed down.

2. The overall operating rate of tire enterprises has rebounded

On the demand side, the overall operating rate of rubber tire enterprises has increased: the operating rate of semi steel tire enterprises has increased, and production output is stable under export support. Currently, most enterprises still have a shortage of snow tires. As enterprises gradually schedule production, the shortage phenomenon has been alleviated; The operating rate of all steel tires has decreased, and inventory is high. Currently, enterprises mainly focus on destocking.

Macro factors:

The international crude oil market has been fluctuating recently. Firstly, the economic data is poor, and the news is bearish for the oil price market. The inflation level in the United States remains a concern, with the Federal Reserve indicating that interest rates may still be raised in the future, and the US dollar rising, putting pressure on the prices of commodities such as crude oil and gold denominated in US dollars; The multiple economic data released by the United States have made the market bearish about the future demand outlook, leading to a decrease in crude oil prices. Secondly, the supply tension caused by the situation in the Middle East has eased, as the seasonal decline in internal demand in the Middle East region has led to an increase in its export share; The peak oil season in North America and Europe has ended, and demand has declined, suppressing the crude oil market. Thirdly, the US crude oil inventory growth exceeded expectations, coupled with market concerns about demand in the Asian region and bearish factors, leading to a decline in international oil prices during this cycle.

Recently, rainfall in foreign raw material production areas has eased, and the output of raw materials has improved; In mid to late November, rubber cutting will gradually stop in the Yunnan region of China, and domestic raw material production will be slightly reduced; At present, the export situation of tire enterprises is good, and there is a certain demand and positive support for the natural rubber market in the short term; Recently, the futures market has experienced significant volatility, and the natural rubber market has increased wait-and-see. At present, terminal demand is still weak, but the expectation of production reduction is becoming increasingly fierce. It is expected that the natural rubber market may experience broad fluctuations and consolidation in the near future.


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