Weekly Summary: RU2005 Price Moved Below Support Line (Dec 13 – Dec 19)

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1 Market

NR Weekly Average Price

SHFE

dominant contract RU2005

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(unit: /mt)

INE

dominant contract

NR2003

(unit:RMB/mt)

TOCOM

(unit: yen/kg)

Dec 06-

Dec 12

13,247.00

11,281.00

197.96

Dec 13-

Dec 19

13,061.00

10,999.00

199.04

Change

-186.00

-282.00

+1.08

Change rate

-1.40%

-2.50%

+0.55%

Spot Market Price

China Mainstream Market NR Weekly Average Price

(unit: RMB/mt)

Market

Shanghai

Shandong

Grade

SVR 3L

RSS 3

STR 20  mixed

SCR10

Dec 06-

Dec 12

12,295

12,365

14,810

11,925

11,790

Dec 13-

Dec 19

12,210

12,385

14,660

11,895

11,850

Change

-85

+20

-150

-30

+60

Change rate

-0.69%

+0.16%

-1.01%

-0.25%

+0.51%

2.

From December 13 to December 19, SCI’s NR Price Index dropped to 534.13, down 11.68 or 2.14% from December 12. SCI holds the will continue to fluctuate downwards next week, although the price drop will be limited. It’s likely the rubber price will return to RMB 12,500-12,700/mt.

This week, NR futures price fluctuated downwards. RU2005 price went under RMB 13,000/mt which was the support line. It went even as low as RMB 12,700/mt. The price drop was mostly because the previous bullish factors were gone, the basis widened, the increased quickly, the market was under selling price, and decreased position.

As of December 19, the weekly average price of RU2005 was RMB 13,061/mt, down RMB 186/mt or 1.40% W-O-W. The weekly average price of NR2003 was RMB 10,999/mt, down RMB 282/mt or 2.50% W-O-W.

3. Market Forecast

SCI holds that the rubber market will continue to fluctuate downwards next week, although the price drop will be limited. This week, the price declined, mostly because bulls decreased position greatly, and the capital mostly was flowing out of the market. Next week, the capital outflow will go on, and the price will return to RMB 12,500-12,700/mt. There will be no noticeable bearish factors regarding the fundamentals. However, when the influence of bullish factor is subsiding, the price is unlikely to rise further. As the bulls decrease position and bears increase position, the price will dip. Generally speaking, before the Spring Festival comes, the rubber will see a sharp rise. Thus, the price drop will likely occur within two or three weeks.

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