Weekly Summary: NR futures prices on the SHFE first rose and then fluctuated (Feb 14 – Feb 20)

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1 Market Price

NR Futures Weekly Average Price

SHFE

dominant contract RU2005

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(unit: RMB/mt)

INE

dominant contract

NR2004

(unit:RMB/mt)

(unit: yen/kg)

Feb 07-

Feb 13

11,411.00

9,618.00

178.08

Feb 14-

Feb 20

11,620.00

9,765.00

158.38

Change

+209.00

+147.00

-19.70

Change rate

+1.83%

+1.53%

-11.06%

Natural Rubber 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

Feb 07-

Feb 13

11,215

11,450

13,440

11,080

11,350

Feb 14-

Feb 20

11,335

11,525

13,535

10,970

11,300

Change

+120

+75

+95

-110

-50

Change rate

+1.07%

+0.66%

+0.71%

-0.99%

-0.44%

2. Market Review

From February 13 to February 19, SCI NR Price Index rose. As of February 19, the index was 508.35, up 6.87 or 1.37% from February 12. Recently, NR futures prices have been following the movement of market, and kept bouncing back moderately. This situation will likely continue next week. Investors showed thin passion for trading. Market players mostly stayed on the sidelines, biding their time to get in. From the perspective of fundamentals, bearish and bullish factors co-existed. Rubber has stopped in . China’s downstream factories are re-opening gradually. International crude prices have performed strongly. All this effectively supported NR market. However, the inventories are still high, and synthetic rubber prices were relatively low, dragging down the rubber prices. Thus, NR futures prices on the SHFE will continue to bounce back moderately.

This week, NR futures prices on the SHFE first rose and then fluctuated. RU2005 prices were fluctuating in the range of RMB 11,320-11,740/mt, and the mainstream prices hovered around RMB 11,600/mt. Futures prices moved up for the following reasons. First, due to the plague of locusts in India and , prices of agricultural products commonly rose. Capital came to the market, pushing rubber prices up. Rubber tapping has stopped in Thailand, and the feedstock prices rose, supporting the rubber market.

As of February 20, the weekly average price of RU2005 was RMB 11,620/mt, up RMB 209/mt or 1.83% W-O-W. The weekly average price of NR2004 was RMB 9,765/mt, up RMB 147/mt or 1.53% W-O-W.

3. Market Forecast

NR futures prices on the SHFE bounced back moderately this week, and will fluctuate strongly next week. In the market, investors showed thin passion for getting in, and most market players stayed on the sidelines, biding their time. From the perspective of fundamentals, bearish and bullish factors co-existed. Rubber tapping has gradually stopped in Thailand, and the feedstock prices moved up again and again. This could effectively support the rubber prices. The operating rate at Shandong-based tire producers has recovered to nearly 60%. However, influenced by the restrained transportation services, tire producers were largely consuming their own inventories and rarely procured. The international crude have performed strongly recently, which supports the commodity index to rise further. Nevertheless, the inventories are still at a high level, the synthetic rubber prices are low, the spot market is tepid, and it still takes time for the demand to recover. All in all, NR futures prices will fluctuate in a limited way next week. The line will be RMB 11,800-12,000/mt.

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