In August, the natural rubber market in China showed a “V” shaped fluctuation trend. Among them, the prominent upward trend of the Shanghai Rubber 01 contract is from around 12800 yuan/ton to around 13330 yuan/ton, with an upward range of about 500 yuan/ton.
According to the Commodity Market Analysis System of the Business Society, the market trend of natural rubber this month was initially downward and then upward, with a turning point around August 15th. The spot rubber market price in China’s natural rubber market was around 12010 yuan/ton on the first day of this month, and then decreased to around 11760 yuan/ton. It then continued to fluctuate and rise to around 12090 yuan/ton. Although the monthly increase was only 0.67%, the maximum amplitude of the half month market was around 2.77%.
Factors affecting this month:
1. The weather in the production area affects the production of new rubber more before and less after
On the supply side, in terms of new rubber production, during the peak season of global new rubber production, in the first half of the month, although the supply of new rubber continued to decline due to latex prices, which suppressed the enthusiasm of rubber farmers to cut rubber, the weather conditions were good, and the increase in new rubber production was relatively significant; High spot inventory, downstream on-demand procurement; Although the import volume of ports in China has decreased, due to the lack of significant growth in downstream demand and consumption, the production and inventory supply of new rubber continue to be high, and prices are under pressure, leading to a downward trend in the market. In the second half of the month, firstly, the main production areas such as Thailand and Vietnam are affected by rainfall, resulting in a reduction in production. Secondly, the expected impact of the recent increase in demand in the product industry has led to an improvement in the enthusiasm of rubber farmers for cutting rubber compared to the previous period; Once again, in the previous stage, traders’ imports decreased, and the pressure on rubber imports slowed down to a certain extent. In terms of inventory, the entry speed of spot inventory has slowed down, and the arrival volume of dark glue at the port has decreased. Driven by the improvement in the production of products in the Qingdao Free Trade Zone’s spot glue warehouse, the speed of destocking has accelerated.
2. The demand is gradually increasing, and the peak season is expected to increase
On the demand side, although the “Golden Nine” is getting closer, downstream product enterprises just need to continue to improve. The domestic sales of tires continued to be insufficient this month, but the demand for foreign trade gradually increased. The demand for domestic travel and logistics industries continued to release, downstream consumption continued to increase, and the operating rate of product factories continued to be high. The natural rubber market continues to rise slightly, and the sentiment of “buying up rather than buying down” in the market is still relatively obvious. The traditional consumption peak season of “Golden Nine Silver Ten” is approaching, and driven by frequent national policies and measures to promote automobile consumption, tire companies have a certain stock demand. With the rebound in demand for latex products and the increase in raw material prices, natural rubber procurement is more active than in the previous stage, but the amplitude is not very prominent.
3. Further Transmission of Rotational Storage News Enhances Market Atmosphere
The news spread in the second half of this month when there was another round of storage news in the market, leading to 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.
Future Market Forecast:
Regarding the future market, recent rainfall in Southeast Asia has had a significant impact on the production of new rubber, and the supply of new rubber has slowed down. The current export situation of tire enterprises is good, and factories are operating at a high level. The “Golden Nine Silver Ten” consumption peak season is approaching, and the natural rubber market has some positive demand support. Analysis suggests that natural rubber, which has been at a low market level for a long time, may experience fluctuations and upward trends in the future market driven by the aforementioned factors. However, the demand situation is only showing a positive trend and has not entered a stage of significant increase, so it is inevitable to experience further fluctuations.
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