natural rubber market weakened in May

The system of business society commodity index shows that the natural rubber commodity index on May 30 was 38.88, which was flat with yesterday, down 61.12% from the peak of 100.00 (2011-09-01) in the cycle, up 42.52% from the lowest point of 27.28 on April 02, 2020（ Note: period refers to the period from September 1, 2011 to now

Figure 2: trend chart of main price of natural rubber in May 2021

Data monitoring shows that in May 2021, the domestic total latex Market of natural rubber increased slightly and continued to fluctuate and weaken: the mainstream reported 13407.5 yuan / ton on the first day, 12850 yuan / ton on 31, and 4.16% monthly; Among them, the highest report this month is 14040 yuan / ton, the lowest is 12777 yuan / ton, and the maximum amplitude is 8.99%. The main factors that affect the weakening of the market are the gradual increase of production, insufficient demand and low operating rate.

From the perspective of new rubber output, the main production area of natural rubber in China is normally opened and cut, and the supply pressure is increasing; Among them, the new rubber volume in Yunnan production area is slow to market but the increasing trend of production is established. Affected by the decrease of the starting rate of tire factories, the order of new factories in Hainan is not good, the market is weak and the cost support is weakened. Globally, the latest report released by ANRPC shows that the global production of gum increased 22.5% to 903000 tons in April 2021. Among them, Thailand increased 26.5%, Indonesia increased by 2.8%, Vietnam increased by 100%, Malaysia increased by 9.8%. In April, the global consumption of gum increased 15.1% to 1.219 million tons. Among them, China increased 9.2%, India increased 915%, Thailand fell 2.4%, Malaysia increased by 15.8%. Among them, Thailand, the main producer, increased its exports 34 percent year on year in April, and 20 percent on month. Thailand’s exports are under the trend. Driven by strong growth in the first four months, it is expected that the export growth in May and June will reach double digits. The Thai Association of ship exporters has more firmly confidence in achieving the goal of 4% increase in the whole year, emphasizing that the global economic recovery played a key role in it. Malaysia announced a comprehensive blockade across the country from 1 to 14 June. But during this period, only 17 basic services are allowed to operate. These include transportation (land, water or air); Port, shipyard and airport services and operations (including loading, barge, cargo handling and storage or packaging of goods); Communications (media, telecommunications and the Internet, postal and express, and broadcasting for the purpose of information transmission). The country’s security minister said it would also be allowed to operate rubber plantations and commodity sectors and their supply chains, including trucks transporting rubber. In addition, rubber gloves are allowed to operate at 60% of the workforce capacity and cars (vehicles and parts) are allowed to operate with 10 percent of the workforce.

From downstream demand, from the tire manufacturer’s situation, may is the traditional supply peak of tires. According to the data statistics, the starting rate of the manufacturers in this month is in a decline state compared with the previous month, and the decline rate is beyond expectation. As of May 20, the start rate of all steel tire enterprises was 62.52%, the weekly ratio decreased by 6.08%, and the weekly year-on-year decrease was 2.83%; The starting rate of semi steel tire enterprises is 60.98%, the ratio of cycle to ring is down by 3.75%, and the weekly year-on-year decrease is 2.27%. According to the automobile data, the production and sales of China’s automobile in April respectively completed 2234000 and 225.22 million vehicles, with a 9.3% and 10.8% decrease on a year-on-year basis, with a year-on-year increase of 6.3% and 8.6%. From January to April, the total automobile production and sales respectively completed 8.586 million and 8.748 million vehicles, respectively, with an increase of 53.4% and 51.8% respectively. The growth rate fell 28.3 percentage points and 23.8 percentage points from January to March. Compared with the same period in 2019, the production and sales increased by 2.1% and 4.5% respectively, which was 2.1% and 2.9% higher than that in January to March. According to the data of commercial vehicles, the domestic commercial vehicles production and sales in January to April respectively completed 1918000 and 1956000 vehicles, with 47% increase and 47.3% respectively. However, the growth rate of commercial vehicle production and sales in April fell to 1.2% and 2.3% year on year, and demand support was weakened. Foreign: Vietnam: according to the statistics of the General Administration of Customs of the country, the export volume of Vietnamese rubber reached 674million US dollars (4.32 billion yuan) in the first quarter of 2021, an increase of 103% year-on-year. The average price of rubber exports also Rose 14% in the first quarter, reaching US $1660 / T (10640 yuan / ton). Vietnam Rubber Association official said that the main reason for the increase in latex prices is mainly affected by COVID-19, and the supply of multinational goods is decreasing. Besides China, the US imports more rubber from Vietnam, while imports from Thailand and Indonesia are reduced because Vietnam has enough rubber cutting personnel. This is an opportunity for Vietnam to expand its market and increase its exports.

From the aspect of inventory, the total inventory of the previous period was 179866 tons (+910 tons) as of May 28, and the futures warehouse receipts were 176460 tons (-210). As of May 24, the inventory of Qingdao free trade zone was 98700 tons, a 5.35% decrease on a month-on-month basis; The general trade warehouse has 52.17 tons of inventory, down 3.89% on a month-on-month basis, and continues to go on to the inventory removal trend.

From the aspect of import and export, China: according to the data released by the General Administration of Customs on May 7, China imported 577000 tons of natural and synthetic rubber (including latex) in April 2021, an increase of 15.6% year-on-year. From January to April 2021, China imported 2.367 million tons of natural and synthetic rubber (including latex), an increase of 9.7% compared with 2.588 million tons in the same period in 2020. Cambodia: according to the report issued by the Ministry of agriculture, forestry and fisheries, the export volume of Cambodian rubber in the first four months of this year fell 15% to 61056 tons year on year, compared with 71749 tons in the same period last year. Rubber export revenue reached $99.87 million, up 2.5 percent from $97.43 million last year. C’Ivoire: according to preliminary port data released on May 4, the export volume of Ivorian rubber totaled 24242621 tons in the first quarter of 2021, down about 30% from 346135 tons in the same period in 2020. Vietnam: according to the preliminary data released by the Ministry of industry and trade, the export volume of Vietnamese rubber in April 2021 was about 80000 tons, an increase of 92% year on year; The export amount is about US $143million, an increase of about 169% year on year. The total export of rubber from January to April was about 486000 tons, an increase of about 80% year on year; The total export amount was about 817 million US dollars, an increase of about 112% year-on-year. Thailand: according to the world daily report of Thailand, rubber export industry recently revealed that the trend of rubber export in 2021 has greatly improved. According to the latest data of the Ministry of Commerce, the rubber export volume in March was 349000 tons, up 65.5%, with a value of 587million US dollars, an increase of 109.2%. In the first quarter, the export volume of rubber was 870000 tons, up 10.7%, valued at $1.44 billion, up 38.1%. Especially in China, the demand is the first, accounting for 32% of the export share and 17% of the rubber demand; Secondly, the market of Malaysia, Japan and the United States has increased in demand; India’s market demand increased by 127 per cent and rubber products by 32.5 per cent.

From the perspective of industry hot spots, first, the core shortage is serious: due to the shortage of global chip supply chain, Thai media reported on May 9 that the output of Thai cars will be reduced by 40000 vehicles in 2021 year-on-year, and the automobile manufacturers must adjust the chip supply structure to meet the long-term demand. Since the end of 2020, the global automotive industry has been facing the shortage of micro controller, which is an important component of the chip, especially the electronic components used to control the operation of vehicle driving assist system and airbag system, which has caused many automobile manufacturers in many regions of the world to interrupt their production. Secondly, on May 25, the U.S. Ministry of Commerce released the final results of anti-dumping of semi steel tyres imported from Korea, Taiwan, Thailand and Vietnam. The final result of this year is generally better than that of last year. Among them, the region with the most obvious drop is Taiwan, China. A small number of brands have increased their “double reverse” tax, but the increase is small. Compared with the preliminary results of last year, the anti-dumping duties of Linglong tire and Zhengxin tire have been reduced. Among them, Zhengxin tire fell by more than 61%. The final result of the round is the same as the preliminary one, and the export market of the United States is not affected by the “double counter”. Third, the problem of core shortage affects the global automobile industry. Since the end of 2020, the global automobile industry has been facing the shortage of micro controller, an important component in the chip, especially the electronic components used to control the operation of vehicle driving assist system and airbag system, which has caused many automobile manufacturers in many regions of the world to interrupt production. The governments of major auto manufacturers such as the United States, Japan and Germany actively negotiate with chip manufacturers to speed up the production of automotive chips will help to alleviate the global chip shortage in the second half of the year. However, in the long run, the solution to the structural problems of the supply chain of automotive chips will still be the main challenge for automobile manufacturers.

On the back market, the business agency analysis shows that the natural rubber is in the normal supply period of new rubber. Although the supply of glue is slow, it is certain that the supply end pressure is expected to increase in June; At the same time, the domestic production area factory order situation is not good, the new glue price has been reduced; The operating rate of downstream tire enterprises continued to decline, and their purchasing demand for rubber decreased due to the decline of tire market demand; At present, the domestic natural rubber inventory is at a low level, and the market expects that the import volume will be low. The supply of new rubber continues to increase, the downstream construction continues to decline, the natural rubber support is not strong, the possibility of medium-term weak is relatively large, and the short-term natural rubber interval is likely to fluctuate slightly.