China: Natural Rubber Spot Market Faced Large Supply Pressure (Nov. 24)

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1. Natural RMB Market Review

Table 1 Natural Rubber RMB Price

Unit: RMB/

Type

Region

Market price

Change

Remarks

(Yunnan)

Shandong (North China)

8,900-9,000

-50

Zhejiang (East China)

9,100-9,200

-400

Shanghai (East China)

8,900-9,000

-100

Tianjin (North China)

9,000

0

Yunnan (Southwest China)

9,000-9,200

-150

SCRWF (Hainan)

Jiangsu (East China)

9,200

-100

SCR10

Yunnan (Southwest China)

8,600-8,800

0

Shanghai (East China)

Thai RSS3

Shanghai (East China)

10,500

0

Shandong (North China)

9,900

-150

STR20 composite

Qingdao Bonded Zone

9,000

-50

with 18% VAT included

SMR20 composite

Qingdao Bonded Zone

9,000

-50

with 18% VAT included

SVR3L

Hengshui (North China)

9,200

-50

with 18% VAT included

Shanghai (East China)

8,800

-200

with 18% VAT included

Shandong (North China)

8,800-8,900

0

no tax

Zhejiang (East China)

9,000-9,100

-100

with 18% VAT included

Guangdong ()

9,400-9,500

-150

no tax

Mong Cai market

Table 2 Natural Rubber USD Price

Unit: $/mt

Market

Country

Product

Market price

Change

International market

Thailand

RSS3

1,250-1,270

0

STR20

1,230-1,250

0

STR20 composite

1,220-1,250

-15

Malaysia

SMR20

1,220-1,230

0

SMR20 composite

1,200

-20

Indonesia

SIR20

1,190-1,200

0

SIR20 composite

1,200

-15

SVR3L

1,150

0

1,120

0

Qingdao Free Trade Zone

Thailand

RSS3

1,190

-35

STR20

1,130

-35

STR20 composite

1,160-1,170

-10

Malaysia

SMR20

1,120-1,130

-10

SMR20 composite

1,160-1,170

-10

Indonesia

SIR20

1,110

-10

Remarks: Mainstream RMB offers for STR20 composite were RMB 9,000/mt. SVR3L composite was quoted at RMB 9,000/mt.

2. Natural Rubber Spot Market Analysis

Natural rubber (NR) futures market on the SHFE rebounded slightly, but the spot negotiation prices edged lower by RMB 50-150/mt. The USD offers fell $15-20/mt, and those slipped $10-35/mt in Qingdao Bonded Zone.

3. Downstream Market Analysis

The production of all-steel tires changed little, although unstable production was heard in some enterprises with difficulties in capital turnover. This caused a supply shortage of some grades. Most Chinese tire enterprises faced capital pressure as it was the time to pay back to the banks. No new sales policy was heard.

4. Natural Rubber Spot Market Forecast

More than 40kt old NR flowed into the market from the futures cargoes, which added pressure to the spot market. Coupled with decreasing feedstock prices and a high inventory level in Qingdao Bonded Zone, it was unlikely for the market to rebound, let alone the sluggish demand.

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