SunSirs: China Natural Rubber Market has Reached a New High since 2023 and May Continue to Operate in a Stronger Direction

According to the commodity market analysis system of SunSirs, domestic natural rubber spot prices continued to rise in March. Due to the daily limit up of natural rubber futures on March 18th, dealers suspended their quotations and resumed them on March 19th, with an increase of 600-1,000 RMB/ton. As of March 19th, the spot rubber market in China's natural rubber market was around 14,500 RMB/ton, up 10.69% from around 13,100 RMB/ton on March 1st.

In March, the natural rubber market rose, with the Shanghai rubber 05 contract rising from around 13,870 RMB/ton to around 15,500 RMB/ton. On the 19th, the market fluctuated to around 15,400 RMB/ton. Currently, Thailand imports latex barrels at around 14,500-14,600 RMB/ton, bulk at around 13,300-13,400 RMB/ton, Vietnam imports latex bulk at around 12,200-12,300 RMB/ton, and domestically produced latex bulk at around 12,200 RMB/ton.

Supply side: Currently, Thailand's raw material output is limited and prices continue to rise. As of March 18th, the price of Thai raw material glue has risen to 79.5 Thai baht/kg, approaching the historical high of 85 Thai baht/kg (January 2017); Vietnam's production areas are still in a period of no harvest; The domestic market is still in a period of cutting cessation. The production of raw materials is scarce, and prices continue to rise, driving the prices of natural rubber in overseas markets. Domestic natural rubber prices have also increased. In addition, recent overseas prices have been higher than the domestic market, resulting in a decrease in natural rubber arrivals to ports and continuous destocking at ports.

On the demand side: Downstream tire production is at a high level, with an increase in demand. As of March 14th, the operating load of domestic tire enterprises for semi steel tires is around 80%; The operating load of all steel tires in tire enterprises in Shandong region exceeds 70%; Overall, there is some support for natural rubber in terms of supply and demand, but as the price of natural rubber rises, downstream consumers may resist high prices and procurement efforts may slow down.

Inventory: As of March 15th, the subtotal of natural rubber inventory on the Shanghai Futures Exchange increased by 2,078 tons to 217,411; Futures inventory decreased by 250 tons from 209,830. As of March 10th, the total inventory of Tianjiao bonded and general trade in Qingdao area was 652,500 tons, a decrease of 9,400 tons month on month or 1.42%.

Currently, there is a shortage of raw material supply on the supply side, and raw material prices in Thailand continue to rise. In addition, domestic production areas are still in a period of cutting cessation, and the subsequent output trend in domestic production areas is not clear due to the impact of dry weather. The strong raw material prices support the natural rubber market; At present, the operating rate of downstream tire factories on the demand side is high, and enterprises are actively scheduling production, resulting in relatively stable demand for natural rubber; Under the support of automobile policies, the policy side may drive or provide short-term support for rubber prices. It is expected that the natural rubber spot market will continue to operate strongly in the near future.

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