Metallurgy / Chemicals / Rubber & Plastics

Rubber prices have been running down the trend line since this year, and they have fallen for several months without knowing it. At present, they have not seen the meaning of gaining a foothold. The decline in the period from Wanqi to Waner, on the one hand, stems from the unimproved blessing of fundamental problems, and on the other hand, it comes from the gradual suppression of bearish sentiment in the market. However, judging from the recent situation, the rubber price seems to be gradually stabilizing in the short-term. The daily line also released five consecutive positives, but yesterday’s late sell-off quickly wiped out the gains formed in the previous trading days. The bearish sentiment of rubber prices has once again enveloped the disk. From the follow-up, can the rubber market stop falling and stabilize? How to determine the short-term wind direction? As of the close on June 30, 2021, the main rubber futures reported at 12,800 yuan, a drop of 1.46%.

Increased production capacity degrades prices, and supply pressure should not be underestimated

Judging from the performance of the regional distribution range, the production capacity of natural rubber has been in a state of growth in the past few months. According to statistics from the latest ANRPC report, global natural rubber production in May increased by 7.8% year-on-year to 982,000 tons, of which Thailand fell by 12.3%, Malaysia increased by 90.1%, Indonesia increased by 2.8%, and Vietnam increased by 80%. In May, global natural rubber consumption increased by 7.3% year-on-year to 1.052 million tons, of which China increased by 5.5%, India increased by 1%, Thailand increased by 3%, and Malaysia decreased by 1.7%.

ANRPC long-term forecast estimates that in 2021, global natural rubber production is expected to increase by 5.8% over the previous year to 13.812 million tons, of which Thailand will increase by 6.9%, Malaysia will increase by 8.8%, Indonesia will increase by 2.8%, Vietnam will increase by 4.2%, and China will increase by 18.5% unexpectedly. . In 2021, global natural rubber consumption is expected to increase by 6.7% over the previous year to 13.677 million tons, of which China will increase by 4.1%, India will increase by 10.5%, Thailand will decrease by 10%, and Malaysia will increase by 4.3%. On the whole, the production of natural rubber in the world has increased significantly, which is very detrimental to rubber prices.

Unsuccessful demand pulls, prices hurt under retreat

From a demand perspective, in the context of the gradual fulfillment of global natural rubber production expectations, the domestic downstream tire industry orders are not satisfactory, and the recent decline in operating rates has been very obvious. As far as the key automobile industry is concerned, according to relevant statistics, in May 2021, the domestic automobile production and sales will be 10.626 million and 10.875 million respectively, a year-on-year increase of 36.4% and 36.6% respectively. Compared with the same period in 2019, production and sales increased by 3.6% and 5.8% respectively. However, May production and sales fell 8.7% and 5.5% month-on-month and 6.8% and 3.1% year-on-year, and the data will continue to decline this month. Therefore, from a demand perspective, there is already no incentive to continue to raise prices.

Combining the above viewpoints, in terms of rubber futures, considering the dual logic of supply and demand, firstly, the pressure to increase production is very obvious, which will continue to put pressure on prices, and secondly, the downstream demand performance is also very poor, starting to decline, and sales decline. On the whole, there is no momentum to continue upward at present. Waiting for the subsequent inflection point of the market to appear, the short-term forecast is still weak.