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Tuesday, March 21, 2023

Will the old drama sing the routines that limit rubber exports?

Long-lost rubber, long-lost “supply side” reform

The market opened last night, and rubber finally ushered in a long-lost surge. The trigger point of the market is also easy to find:

Thai media reported that the International Tripartite (Thailand, Indonesia, Malaysia) Rubber Council (ITRC) Ministerial Meeting will be held in Bangkok, Thailand from February 21-22, and Indonesia will propose measures to limit rubber exports (AETS) at the meeting. . The implementation of AETS measures and the expansion of the use of rubber in construction are two important measures that Indonesia will prepare to present at the meeting.

In 2017, ITRC agreed to implement the AETS measures (and is the fifth time to implement the control rubber export measures), which requires the export of rubber from the three countries to decrease by 350,000 tons in January-March 2018.

However, looking back at the rubber market in the first half of last year, how much does import reduction by 350,000 tons have on the price-to-price advantage? Perhaps the biggest effect is to delay the bottoming time and change the space for time.

Contradictory car sales

While cheering on the supply side, the car association’s set of data is not so “coordinated.”

According to the statistics of China Association of Automobile Manufacturers, in January 2019, China’s automobile production and sales completed 2.365 million and 2.367 million, respectively, down 12.1% and 15.8% respectively. Among them, the production and sales of passenger cars were 1.995 million and 2.021 million respectively, down 14.4% and 17.7% respectively; the production and sales of commercial vehicles were 370,000 and 346,000 respectively, the output increased by 3.2% year-on-year, and the sales volume decreased by 2.2%.

Heavy truck sales, which are closely related to rubber consumption, also showed signs of weak growth. From 2014 to 2018, heavy truck sales grew rapidly in the first three quarters of 2016 and 2017. After entering 2018, in addition to the traditional peak season of heavy truck sales in March-June and December, the sales volume of heavy trucks in the rest of the year fell year-on-year. From the beginning of the year, heavy truck sales in 2018 increased by 3.24% year-on-year, while the growth rate in 2017 reached 32.45%.

How long does the rubber that is favored by funds last?

Judging from the near-distance monthly spread of the port, the far-month premium is $22.5, which is still within the normal range.

The price difference between the cup and the glue is also in line with the seasonal variation, and there is no obvious abnormality.

For the rubber category, it has been oscillating between 12,500 and 10,500 since March last year. Even if the entire energy-driven sector driven by crude oil is high, it has not attracted the attention of funds. But since the listing of rubber options in January, the volatility of rubber has improved significantly.

Today’s big rise is also in the case of news hype, capital inflows push rubber up, and the current situation of loose supply and demand on the fundamentals has not improved.

However, given the risk of arbitrarily empty rubber after the inflow of funds, it is considered that the risk of the variety is a bit large, you can consider using the option to build a bullish bearish portfolio. For example, buy a call option with an execution price of 13,000 (Ru1905) and sell a call option for 12750 (Ru1905).

The maximum profit of 52 yuan/ton is locked at the same time, and the maximum loss is 198 yuan/ton. When Ru1905 is higher than 12,802 yuan/ton, it will start to lose money.

Translated by Google Translator from http://www.cria.org.cn/newsdetail/47716.html

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