Supply is not large, demand will be weak, natural rubber price rebound road twists and turns

On April 30, the natural rubber commodity index was 39.76, up 0.06 points from yesterday, down 60.24% from the highest point of 100.00 points in the cycle (2011-09-01), and up 45.75% from the lowest point of 27.28 points on April 2, 2020( Note: period refers to the period from September 1, 2011 to now

Figure 2: Trend of natural rubber mainstream price in late April 2021

As shown in Figure 2, natural rubber showed a slight upward trend in late April. Spot rubber: the monitoring data of natural rubber in East China (standard 1) showed that in the second half of this month, the mainstream quotation of domestic Baodao whole milk in East China market was about 13015 yuan / ton on the 16th, and 13407 yuan / ton on the 30th, up about 3%. Among them, the highest price in the last ten days was 13437.5 yuan / ton on the 22nd, and the lowest price was 13015 yuan / ton at the beginning of the month, with a maximum amplitude of 3.25%. But in fact, this period of natural rubber out of a similar unilateral upward trend, the market in the last ten days to small shocks.

New rubber output: latest monthly global rubber output data: according to the latest report released by ANRPC, the global natural rubber output increased by 1.3% to 910000 tons in March 2021. Among them, Thailand dropped by 10%, Indonesia by 2.8%, Vietnam by 12.5% and Malaysia by 44.9%. In March, global consumption of natural rubber increased by 7.4% to 1.234 million tons. Among them, China increased by 3.3%, India by 40.8%, Thailand by 8.4% and Malaysia by 3.4%. In April, the epidemic situation in Southeast Asia rebounded, and the situation was grim. Thailand had begun a curfew, and India’s situation was so serious that it was out of control. Although the epidemic has increased the demand for the rubber market, the industrial environment of India, which accounts for nearly 8% of the rubber production, has been damaged. Not only the rubber output has been affected, but also the local demand for China’s rubber products has been seriously affected. The most important thing is that the out of control of the epidemic has led to global concerns about the future economic situation. Since mid April, the rubber market has rebounded, It’s not powerful. There was a shock in the middle, and then it went up slightly.

Downstream demand: data show that from February 18, the end of the Spring Festival holiday, to around the 25th of that month, bulk raw materials followed the crude oil and the related commodity market rose sharply, which boosted the enthusiasm of enterprises to resume work and production. The operating rate of tire enterprises quickly increased, and the tire production was at a high level in the past five years in the peak season of traditional sales in spring, By the first half of April, the operating rate remained high. However, since the middle and late ten days, the complex international situation and the serious epidemic situation in parts of Southeast Asia have doubled the concerns of enterprises about overseas market demand, weakened the market procurement demand, and reduced the operating rate of tire enterprises. It is understood that this is also the first decline in the operating rate of tire enterprises after the Spring Festival. According to the latest data released by the National Bureau of statistics, China’s production of rubber tire casing in March was 82.649 million, up 18.7% year on year. From January to March, the output of rubber tire casing increased by 46.8% over the same period last year to 214.716 million. According to the analysis, the April data may be different.

Import and export: from the perspective of China’s situation, according to the data released by the General Administration of Customs on April 13, China’s imports of natural and synthetic rubber (including latex) totaled 711000 tons in March 2021, an increase of 18.1% year on year. From January to March 2021, China imported 1.791 million tons of natural and synthetic rubber (including latex), an increase of 8% compared with 1.659 million tons in the same period of 2020. Thailand: in the first quarter of 2021, Thailand’s exports of natural rubber (excluding composite rubber) totaled 870000 tons, up 11% year on year. Among them, the total export of standard gum was 383000 tons, up 17% year on year; The export volume of cigarette glue was 125000 tons, a year-on-year decrease of 6%; The export of latex was 351000 tons, up 12% year on year. Vietnam: according to the latest data, Vietnam exported 156000 tons of natural rubber in the first quarter of 2021, an increase of 56% over last year’s 100000 tons. Among them, the export of standard rubber was 101000 tons, with a year-on-year increase of 37%; 18000 tons of cigarette glue were exported, with a year-on-year increase of 33%; Latex exports were 35000 tons, up 182% year on year. In the first quarter, Vietnam exported 257000 tons of mixed rubber, up 86% from 138000 tons last year. Among them, the mixed export of SVR3L was 78000 tons, up 105% year on year; The mixed export of svr10 was 176000 tons, up 87% year on year; The mixed export of RSS3 was 3000 tons, a year-on-year decrease of 58%. Vietnam’s exports of natural rubber to China totaled 23000 tons, up 72% from 13000 tons last year.

Inventory: as of April 30, 2021, the natural rubber inventory in the previous period was 178192 tons, and the warehouse receipt was 176240 tons, with an increase of 650 tons and 2160 tons respectively; The inventory of No. 20 glue was 58422 tons, and the warehouse receipt was 56074 tons, increasing by 180 tons and 382 tons respectively; In the previous period, the natural rubber inventory and warehouse receipt increased significantly, and the 20 rubber inventory and warehouse receipt inventory also increased.

Tire price increase: Recently, Hubei outlets Tire Co., Ltd. issued a price increase notice: the price of some specifications of tires will be increased by 30-50 yuan on the basis of the original price, and the price of all tread patterns and agricultural tire series of some specifications will be increased by 2%. In fact, since October last year, price increase notices have been issued repeatedly. Olas tire said that the price rise again at the end of April, one is to remind dealers to pay close attention to stock up before the price rise, the other is the side reaction of the rising tide of tire enterprises, the afterglow is still there, and it is preliminarily judged that there will be no possibility of price reduction in a short period of time. In fact, the analysis shows that the price of natural rubber is less than 14000 yuan / ton among the main raw material prices of tires in the near future. The price fluctuates slightly and rebounds from time to time. There is no big rising market, and the price of carbon black also shows a downward trend. The biggest driving factor for the tire price increase this time is the sharp rise in the price of steel. As shown in Figure 3, the price of iron and steel industry has risen sharply in the past year

Figure 3: trend chart of steel industry index from April 2020 to April 2021

On April 30, the steel index was 1365 points, up 2 points from yesterday, reaching a record high in the cycle, up 176.88% from the lowest 493 points on December 20, 2015( Note: period refers to the period from December 1, 2011 to now

About the future: according to the analysis of the business community, rubber tapping has begun in Southeast Asian rubber producing countries and China’s main producing areas, and there is a certain supply. Although it is not enough to have a great impact on the market, the impact on the market expectation has appeared. The difference is that the epidemic situation in Southeast Asia is serious, especially in India, In addition, the epidemic situation in Europe and the United States and the complexity of the relationship between many countries and China have a certain interference on the future economic recovery. The start-up of downstream tire enterprises has been affected to a certain extent. It is expected that with the continuous increase of new rubber supply, natural rubber will be more likely to weaken in the future.