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Wednesday, May 25, 2022

High inventory overwhelmed Shanghai rubber market

Shanghai rubber main contract yesterday, 1309 fell to 18,615 yuan / ton, the lowest probe to 18,575 yuan / ton, compared to the highest point in February fell nearly 9,000 points, or more than 30%.

After the Spring Festival, the macro weakening of the atmosphere, the combined effect of systemic risks widening the weak fundamentals of natural rubber, Shanghai rubber market continued to fall. Yesterday Shanghai rubber main contract 1309 fell to 18,615 yuan / ton, compared to the highest point in February fell nearly 9,000 points, or more than 30%.

Increased systemic risk market pessimism

Since February, the macro bad continued to plague the market.Domestically, the real estate market regulation overweight, as well as the first quarter economic data is significantly lower than expected, indicating that the fragile recovery of the real economy, unstable market confidence.The international front, the United States in March non-farm payrolls data is less than expected, the Fed exit quantitative easing debate began to affect the market; shadow of debt continued to plague Europe, the fermentation of the Cyprus problem was aggravated market pessimism, Italy’s new government cabinet deep deadlock in the euro zone continued economic weakness, lower inflation data led to market speculation that the ECB may cut interest rates; Japan, meanwhile, continues to expand the scale of quantitative easing, euro, yen and other competitive devaluation of the dollar is moving away from a bear market cycle up stage is not conducive to commodity prices.

In addition, the recent gold, silver as well as international crude oil prices fell sharply, the negative impact on the commodities market is not over yet.

The IRCo internal significant differences, policy support weakening

In August 2012, natural rubber prices continued to fall, the natural rubber producing countries Union (irco) reached 30 million tons of natural rubber exports mitigation plan. To the end of March this year, the agreement has been executed expired. In order to continue to support the current weak rubber prices, Thailand has decided to reduce rubber exports measures for a further two-month extension.

However, due to the previously taken measures to support the global rubber prices have little effect, Indonesia, the world’s second largest rubber producing countries called for its companion, Thailand and Malaysia abandoned Southeast Asia Rubber Agreement. At this point, the three main producing country’s internal policy differences have begun. And there is still the possibility of the introduction of new rubber prices continued to fall, the three main producing countries limited production price policy.Last week, news that Thailand will introduce a new policy initiatives to support rubber prices fell, but time and again come to nothing due to the expectations of the market policy of the main producing countries, the effect of increasingly weaker.

The new adhesive is cut open, high inventories, lackluster fundamentals

Weak downstream demand, the slow process of destocking. Since the second half of 2011, the world’s natural rubber market supply and demand pattern began to shift an oversupply of bonded area of ​​domestic stocks showing a rising trend. As of April 15, the total inventory of Qingdao Bonded rubber continue to increase over the end of March 8300-366900 t a record high level. Rubber prices fell sharply, the downstream plant procurement more cautious the Qingdao Bonded Warehouse rubber out of the library is still flat, the inventory is still further upside.

Similarly, incompetent, subject to demand and increase the supply, delivery warehouse in Shanghai Futures Exchange total natural rubber stocks had climbed to the highest level of the same period last year of 119,149 tons. Late to the inventory of the progress will continue to constrain the disk trend.

Producing areas cut open, the pressure is still listed on the new plastic. April, the main rubber producing areas in Indonesia will enter the high yield of Songkran in Thailand will also be gradually restored after the open cut work. Domestic front, Yunnan dry weather continues, but producing relatively unscathed, the open cut gradually restored since late mid-March, there are new glue into the market; Hainan in April has been gradually cut open, new rubber market is expected to time in early May.

Overall, the macro side, the lack of bullish factors to boost the weakening of natural rubber itself bearish fundamentals the heavy producing countries Policy support domestic high pressure on the stock, the new plastic cut open the pressure is still the overall atmosphere of the natural rubber market is more pessimistic. Nevertheless, I believe that rubber prices fell sharply, most of the negative factors has to be fulfilled again down space is relatively limited, late into the possibility of low oscillation market. From the side view, after breaking the 20,000 mark, refer to the historical support 17500.

Translated by Google Translator from http://market.cria.org.cn/25/14110.html

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