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SunSirs: China Natural Rubber Market Rose first and then Fell in November
December 04 2023 13:54:10SunSirs(Selena)

According to the commodity market analysis system of SunSirs, the domestic natural rubber trend in November first rose and then fell. The spot rubber market in China was around 12,860 RMB/ton on November 1st and around 12,850 RMB/ton on November 30th, a decrease of 0.08%.

In November, natural rubber rose first and then fell. The Shanghai rubber 01 contract fluctuated from around 14,200 RMB/ton to 14,600 RMB/ton, and then continued to decline to around 13,600 RMB/ton. Currently, Thailand imports latex barrels at around 11,500-11,600 RMB/ton, bulk at around 10,100-10,300 RMB/ton, Vietnam imports latex bulk at around 9,500-9,600 RMB/ton, and domestically produced latex bulk at around 9,300-9,500 RMB/ton.

Influencing factors:

1. Rainfall in foreign production areas has eased, and domestic production areas have gradually entered a period of cutting cessation

On the supply side, rainfall has decreased in Thailand, Vietnam, and the domestic Hainan production area, but overall raw material output is still lower than previous years' expectations. At the end of the month, the Yunnan production area in China entered a period of cutting cessation, and the purchase prices of raw materials remained 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 26, 2023, the total inventory of Tianjiao Bonded and General Trade in Qingdao area was 70100 tons, a decrease of 14,200 tons from the previous period and a decrease of 1.99% compared to the previous period. Qingdao Free Trade Zone continues to reduce inventory, and the rate of total inventory reduction has slowed down.

2. Tire companies have seen a slight decline in operating rates

On the demand side, the overall operating rate of rubber tire enterprises slightly declined in November: the operating rate of semi steel tire enterprises remained high, and currently, some enterprises have basically completed their production scheduling for snow tires; The operating rate of all steel tires has fallen, and inventory is high. Currently, enterprises mainly focus on destocking.

Macro factors: The international crude oil price trend declined in November. As of the end of the month, the settlement price of the main WTI crude oil futures contract in the United States was $76.41 per barrel, and the settlement price of the main Brent crude oil futures contract was $81.47 per barrel. The crude oil price in November fell by 5.69%. Firstly, the economic data is poor, and the news is bearish for the oil price market. There are still concerns about inflation levels in the United States, and the Federal Reserve has indicated that interest rates may continue to rise in the future. The US dollar is rising, putting pressure on prices of commodities such as crude oil and gold priced 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 been alleviated, as the seasonal decrease in internal demand in the 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 increase in US crude oil inventories exceeded expectations, coupled with market concerns about demand in the Asian region and negative factors, resulting in a downward trend in crude oil prices.

Recently, rainfall in foreign raw material production areas has eased, and the output of raw materials has improved; The Yunnan production area in China will enter a comprehensive shutdown phase in December, and the production of domestic raw materials will be reduced; At present, the operating rate of tire enterprises has slightly declined, and the overall inventory of enterprises has increased, which has limited support for the rubber market; At present, terminal demand is weak, coupled with reduced production of raw materials, and it is expected that the natural rubber market will experience a wide range of fluctuations and consolidation in the near future.


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