There is support at the bottom of natural rubber prices due to reduced overseas supply
2023/11/24
Yesterday, Shanghai had 13000 (-100) full latex, a price difference of -1010 (+185) for full latex RU2401, a RMB mixed price difference of 12050 (-100), a price difference of -1960 (+185) for human mixed RU2401, a BR9000 Qilu spot price difference of 12200 (-50), and a BR9000-BR main force of 125 (+160).
In October 2023, the seasonally adjusted annual sales of light vehicles worldwide reached 94 million units per year, which is basically the same as the revised September data. The global sales of light vehicles in that month increased by nearly 11% year-on-year, and the cumulative sales from January to October also increased by over 10% year-on-year. The Rubber Authority of Thailand predicts that the export volume of natural rubber from Thailand in the fourth quarter will be 1.125945 million tons, an annual increase of 0.48%. The total export volume is expected to be 4.267 million tons in 2023, a decrease of 4% from the previous year.
Natural rubber: The temperature in Yunnan's production area has dropped, and it is planned to gradually enter a shutdown period from the end of the month. The production of glue is limited, which will provide some support for raw material prices; The decrease in rainfall in Thailand, Vietnam, and Hainan production areas in China has led to a weak decline in raw material purchase prices due to increased expectations of raw material supply; The seasonal demand in the downstream tire industry is gradually showing a low season, with overall slow shipments. The inventory of all steel tires continues to show a cumulative trend, dragging down the operating rate, while the operating rate of half steel tires continues to maintain a high level; The social inventory of natural rubber in China has slightly increased on a weekly basis, with an increase in light colored rubber inventory and a decrease in dark colored rubber inventory. Inventory accumulation has been suppressed, and rubber prices are operating at a weak level.
Shun Ding Rubber: The supply side of Sichuan Petrochemical's Shun Ding Rubber Plant has restarted operation, the Shandong Weite Shun Ding Rubber Plant has temporarily shut down, and the Maoming Petrochemical Shun Ding Rubber Plant is scheduled for maintenance in mid December, resulting in a decrease in supply pressure; The utilization rate of downstream tire production capacity is stable but weak, with average demand performance. Sample companies have slightly accumulated inventory, and synthetic rubber is operating under pressure. Considering the recent slight rebound in crude oil prices, the cost side may have some support for BR rubber, so be cautious of the risk of short selling.
Fundamentally speaking, the reduction in overseas supply and production is relatively certain, and the month on month import in China has been reflected. Demand remains stable at the end of the year, with weak supply and stable demand providing support at the bottom of prices.
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