Since August, the domestic natural rubber market has fluctuated and risen. As of August 17th, the spot rubber market in China’s natural rubber market was around 17133 yuan/ton, an increase of 3.94% from 16483 yuan/ton at the beginning of the month.
The supply side’s strong production season resulted in lower than expected increase in production, with strong cost support. Since August, frequent rainfall in Thailand and Vietnam has disrupted rubber cutting, and Thai cup rubber has maintained a high level of around 67 baht/kg, with strong support from raw material costs for natural rubber. Yunnan Province in China continues to experience heavy rainfall, while Hainan is approaching a halt to logging, resulting in limited production of adhesive. The supply of raw materials is tight both domestically and internationally.
The inventory side continues to destocking, with a total inventory of 642100 tons at Qingdao Port as of August 16, a slight destocking of 2900 tons compared to the previous month; The futures warehouse receipts of the previous exchange fell synchronously, easing the pressure of explicit inventory and limiting the downward space.
The demand side is in the off-season of summer, with insufficient upward momentum. As of August 14th, the operating load of semi steel tires in domestic tire enterprises was 64.32%, while the operating load of all steel tires in Shandong tire enterprises was 63.01%. Finished product inventory remains high, with domestic tire companies having 40.2 days of full steel tire finished product inventory and 46.1 days of semi steel tire finished product inventory. Factories mainly adopt on-demand procurement and have a weak willingness to actively replenish inventory.
Recently, market expectations for the Federal Reserve’s interest rate cuts have risen, and risk appetite has been restored; The strengthening of international crude oil prices has pushed up the cost of synthetic rubber, highlighting the comparative advantage and indirectly boosting trading sentiment in the natural rubber market.
Market forecast:
From a fundamental perspective, the short-term market for Tianjiao is expected to fluctuate within a range. The peak season for rubber cutting in Southeast Asia has suppressed the upward potential of rubber prices, but rainfall and El Ni ñ o hazards in production areas may bring pulse like fluctuations. Domestic port inventory is slowly decreasing, with low warehouse receipts providing bottom support; Tires are still in the off-season, with limited recovery in production. Downstream demand is mainly driven by essential purchases, making it difficult for demand to drive upward trends.
In September, tires enter the traditional peak season, and factory stocking is expected to drive the recovery of production, resulting in a slight increase in rubber prices. At the same time, overseas monetary policies and crude oil will also disrupt the market for Tianjiao.
