Rubber maintain range shock trend

With the digestion of the negative factors of liquidity tightening, the fundamentals of the superimposed rubber market are still optimistic. This week, the domestic Shanghai Rubber Futures 2105 contract bottomed out and rebounded, with the futures price dropping to 14325 yuan / ton. At present, it is still operating in the range of 14000-14500 yuan / ton.

From the macro point of view, short-term macro atmosphere is empty and the expectation is changeable, which is still the biggest hidden danger hindering the upward trend of rubber price. The popularity of vaccination and the development of global COVID-19 will affect the short-term market sentiment, while the Federal Reserve, the European Central Bank, the Bank of Japan and the Central Bank of China will set the trend for the middle price of rubber prices. At present, there is still some uncertainty in the global epidemic situation, and the macro short atmosphere of rubber makes it difficult for rubber prices to start a sharp rise.

From the point of view of the supply side, the current domestic main production areas have entered a state of cutting stoppage. However, in Southeast Asia, the weather forecast of cooling occurred in Thailand, and thunderstorms occurred in most areas of Southern production area, which hindered the output of raw materials. According to the preliminary assessment, the flood will last until March 2021, which will have a great impact on the rubber plantations in southern Thailand. The per unit area yield of rubber trees will continue to decline from December 2020 to March 2021. In addition, affected by the rainfall and flood in January, four southern provinces in Thailand, namely narativa, Yala, songka and beidanian, suffered from serious rubber tree defoliation. It is reported that defoliation has reduced rubber production by as much as 60%. It is estimated that the income loss of rubber farmers in southern Thailand is about 4.075 billion baht, and the rubber production will decrease by about 80000 tons. If the problem of deciduous leaf disease becomes more and more serious in Tainan production area in the later stage, it may hinder a new round of tapping operation in the future, and the rubber price will be more strongly boosted.

From the perspective of demand side, in January 2021, China’s heavy truck market is expected to sell more than 180000 vehicles of various types, with a significant year-on-year growth of 54%. The monthly figure of 180000 vehicles has a different meaning. It means that at the beginning of 2021, the sales volume of the heavy truck market in January broke the historical record, creating a new high in January – about 63000 more than the previous historical record of January 2020 (116600 vehicles)! At the same time, it also means that the heavy truck market has set a new record for the tenth consecutive month – from April last year to January this year, the monthly sales volume of the heavy truck market has set a new monthly sales record, reaching a new high.

In the downstream tire industry, affected by the return of employees from other places and the rise of finished product inventory, the start-up of domestic tire enterprises has declined month on month since January. It is understood that the upcoming Spring Festival holiday, tire factories around Shandong Province have been working out plans to stop work and resume work during the Spring Festival. Among them, most tire enterprises in Dongying and Weifang of Shandong province plan to stop work and have a holiday around February 4 and return to work around February 19, which is consistent with the pace of stopping and starting work in previous years. Therefore, near the Spring Festival, the operating rate of downstream tire factories will continue to decline. According to the monitoring data, by the week of January 29, 2021, the starting load of all steel tires of tire enterprises in Shandong was 67.51%, down 1.42 percentage points from last week. The starting load of semi steel tire of domestic tire enterprises was 64.47%, 2.14 percentage points lower than that of last week. At present, the average inventory turnover days of semi steel tire enterprises are 37.61 days, while the average inventory turnover days of all steel tire enterprises are 41.75 days, which is lower than that of the same period in previous years.

At present, there are signs of the expected turn of domestic monetary policy after the festival, and there are potential risks, which are worthy of investors’ attention. In terms of Shanghai rubber market fundamentals, the supply side production reduction is still expected, and the downstream demand continues to be optimistic. It is expected that the game between macro and fundamentals will still appear in the later stage. The domestic Shanghai rubber futures are expected to maintain the oscillatory consolidation in the range of 14000-15000 yuan / ton, and the standard rubber 2103 is expected to maintain the oscillatory consolidation in the range of 10500-11000 yuan / ton.