Data show that the natural rubber commodity index on July 24 was 31.32, unchanged with yesterday, 68.68% lower than 100.00 (2011-09-01), and 14.81% higher than 27.28, the lowest point on April 2, 2020. (Note: period refers to 2011-09-01 to now)
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Figure 2: price trend of natural rubber mainstream from January to July 2020
From the beginning of January to June 2020, the overall market of natural rubber showed a downward trend and then a small upward trend. The price of natural rubber at the end of March and the beginning of April was a periodic bottom. In May, the Tianjiao Jedi rebounded and fluctuated upward. In June, it continued the upward trend of last month and first rose to the recent highest point. Then, due to insufficient demand support, the price turned downward, and then there was a certain degree of shock rebound. The current month closed About ten thousand yuan. According to the data of natural rubber (bid 1) in East China monitored by the business agency, in July, the mainstream quotation of Baodao whole milk market was about 10089 yuan / ton on the 1st day and 10560 yuan / ton on the 24th, up 4.67% so far this month. Among them, the price of 10560 yuan / ton on the 16th and 24th was the highest price so far this month, and the 10089 yuan / ton on the 1st day was the lowest price of this month, with the largest earthquake amplitude of 4.67%.
Factor analysis:
First, the production of new glue. 2020 is a special year. In previous years, it should be a time when a large number of new gum have been put on the market. However, this year, affected by weather disasters, diseases and insect pests, especially the epidemic situation, the production of natural rubber in China has to be delayed from January to February. However, the actual production is very small. At present, China’s domestic area has entered the rainy season, and the production of blister glue and new rubber is unlikely to be very large. In Xishuangbanna, this year’s total latex was almost never obtained. The second standard glue was in short supply in various years, and other brands of glue were often out of stock. In addition, the import index was not released, and the shortage of local supply in southern production areas continued for a long time. The epidemic prevention and control of rubber producing countries in Southeast Asia has achieved certain results, and some economic activities have recovered. In July, the weather in Southeast Asia was better, and the output of natural rubber increased month on month, which was lower than that of last year, but the overall tapping work was slow. Since the middle and late June, the rainfall in Thailand’s main production areas has decreased, and the output of raw materials has gradually increased, but the output is lower than that of the same period last year, the purchase price of glue has been lowered, the overall supply of raw materials is tight, the profit of rubber processing is relatively thin, and the shipping date of some standard rubber is delayed. Malaysia’s main production areas have good weather and normal tapping, and the output of raw materials has increased gradually, but the current production is lower than that in the same period of previous years. As the world’s largest latex glove producer, the demand for raw materials has increased significantly due to the epidemic situation. Indonesia’s main production area is in the peak season, but due to the closure of domestic and foreign tire and automobile manufacturing enterprises, many rubber processing plants are facing a sharp reduction in order pressure, which seriously affects the local tapping enthusiasm. Vietnam’s main production area is in the rainy season, but it has little impact on the overall output. The supply is basically normal, but the output is definitely lower than that in the same period in the past. At present, the supply of 3L rubber is increasing, but the inventory is still at a low level, which forms a certain support for the rubber price. The supply of Cambodia’s production areas is normal, but due to the strict control of border trade, the number of raw materials exported to Vietnam has decreased significantly.
Second, import and export. China’s imports of natural and synthetic rubber (including latex) totaled 534000 tons in June 2020, up 21% year-on-year, according to data released by the General Administration of Customs on July 14. From January to June 2020, China imported a total of 3.313 million tons of natural and synthetic rubber (including latex), an increase of 1.9% compared with 3.075 million tons in the same period of 2019. According to the latest data released by Vietnam customs, the total rubber export volume of Vietnam in June 2020 was 136400 tons, up 82.11% month on month and 11.08% year on year; from January to June 2020, the total rubber export volume of Vietnam was 481600 tons, with a year-on-year decrease of 21.81%. In June, the export volume to China was 109000 tons, with a month on month increase of 82.92% and a year-on-year increase of 59.48%; from January to June 2020, the total export volume to China was 339800 tons, with a year-on-year decrease of 12.54%. In June, Vietnam rubber imports totaled 72200 tons, up 22.58% month on month. The above two groups of data show that China’s imports of natural rubber increased significantly in June, the production demand of enterprises was more active than in the earlier stage, and the market confidence was improved to a certain extent.
Third, inventory. As of the 24th, warehouse receipts and futures inventories of the exchange were 237846 tons and 230140 tons, respectively, down 5041 tons and 970 tons from last week. It is reported that the dominant inventory of Qingdao and Shanghai ports and the hidden inventory of production and marketing areas are about 1.1 million tons. It is estimated that the stock of natural rubber in China will reach about 1.5 million tons. The inventory of natural rubber in East China is still high. This is in sharp contrast to the shortage of goods in Yunnan.
Fourth, downstream demand. On July 16, the operating rate of all steel tire enterprises was 68.83%, up 0.53% from the previous week; the operating rate of semi steel tire enterprises was 64.74%, up 0.59% from the previous week. The overseas epidemic situation is repeated, and the recovery of tire export orders is slow, and the uncertainty is large in the later stage. It is reported that at present, the domestic market demand is occupied by the first-line tire brand promotion. The inventory of some manufacturers in Shandong Province has increased. With the advent of the rainy season, the production and sales of tire manufacturers are impacted, and the operating rate of the tire industry is expected to return. In addition, some tire enterprises usually arrange equipment maintenance in the hot season of July and August, and it is expected that the operating rate of the tire industry will decline slightly in the future. From the perspective of foreign markets, in the first half of 2020, the demand for new cars in European passenger car market will shrink by 39.5% to 5101669 units. Among the five major markets, Spain had the largest decline of 50.9%; Germany had the smallest decline of 34.5%; Italy, the United Kingdom and France had 46.1%, 48.5% and 38.6% respectively. Globally, with the lifting of the epidemic blockade and the restart of economic activities, automobile sales slowly recover. However, the China Automobile Industry Association predicts that China’s automobile sales will fall by 10% – 20% this year. According to the prediction of Bloomberg intelligence, the automobile sales in Europe are expected to drop by 20% this year. Tire demand is worrying.
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Fifth, regional differences. As early as the middle of May, the situation of shortage of natural rubber in Yunnan, especially in Banna, began to appear in the middle of May. All kinds of local rubber were in short supply, which led to the continuous firmness of rubber price. According to local traders, the delay in listing of new rubber this year and the fact that some import indexes have not been released in previous years have resulted in the shortage of local supply. At the end of last month and in the middle of this month, the Many articles have analyzed the regional differences of domestic natural rubber market in detail. As in July, this situation still exists, resulting in the regional transmission of goods. The shortage of goods in Banna is still severe. Local traders say that at present, the local tapping volume is not large, and the supply is short, especially the second standard rubber. The new standard second rubber in 2020 has never been obtained, and the original plan of large-scale listing of new rubber has not been realized.
Sixth, trade friction. On June 12, the U.S. Department of Commerce released the preliminary findings of the fourth review on anti-dumping of passenger car and light truck tires against China. Two compulsory responding enterprises obtained 76.46% of the dumping duty rate for refusing to participate in the investigation, and seven enterprises received zero tax rate. On the 26th and 27th of last month, the Ministry of Commerce and industry of India issued a series of announcements to initiate anti-dumping investigations on China’s nitrile rubber and rubber additive px-13. Recently, the Federation of Thai Industries (FTI) protested against the US tire anti-dumping investigation. FTI believes that the United States will seriously affect the Thai industry. Affected by the epidemic situation, Thai industry showed a shrinking trend in the first half of the year. Kriangli, chairman of the FTI, said that the investigation was affected by Sino US trade relations. In recent years, Thailand has continuously attracted foreign investment and established export bases for tire, food and other products. At present, five Chinese tire companies have invested in Thailand, and their main business is tire export. “The United States is observing this phenomenon and trying to set up trade barriers against Chinese products.” Kriangri said that the Thai government should closely monitor the situation and take measures to deal with the US anti-dumping charges. Previously, the United States determined that Thailand’s tire dumping margin was 106% – 218%. The U.S. Department of Commerce will issue the final ruling on November 9, saying that if Thai enterprises are found to have dumping practices, the United States will raise tariffs on related products. The FTI said the investigation opened on July 26 and Thailand would try to clarify the charges. The international economic situation is not smooth, which has a serious impact on the circulation of rubber products.
As for the future market, the analysis of the business agency believes that the growth of new rubber in the production area is slow, the recovery of foreign orders is unpredictable, and the contradiction between supply and demand is still prominent under the situation of high inventory and uncertain demand, and the possibility of a substantial price rise is small. But after all, the price of natural rubber has been at a low level for a long time, and the decline rate will not be great; the shortage of goods in Yunnan, especially in Banna, still supports the price, especially the local price. Under the comprehensive effect, maintain the view that the future market of natural rubber fluctuates slightly until a large number of new gum are listed.
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