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Tuesday, October 5, 2021

Why still see more rubber?

What is Sanjin Quotes?

The rising market that occurred in Golden Nine and Ten Golden Eleven is called the Sanjin market.

Generally, we say that the golden nine and silver ten is the peak commercial season and the agricultural harvest season. But the rubber species has its own peculiarities. Rubber is likely to start to rise in a certain month of Golden Nine Golden Ten Golden Eleven, and there is uncertainty about which month it will start to rise. In order to vividly describe this rising market, we referred to it as the Sanjin market for short.

Why do we think that the rubber three gold market is worth looking forward to? There are three reasons.

1. Reviewing the history, we find that the historical rise is so similar to that of 2021, we can’t help but generate expectations.

2. We respect the laws of rubber itself. This season has been rising for many years.

3. From the perspective of choosing an optimistic price-performance ratio, we are more inclined to be hopeful. Extremely optimistic tends to turn to pessimism. Extremely pessimistic tends to turn to optimism.

rubber

Replay: Why did rubber soar in 2016

We will deduce the possible trend of rubber in the future by reviewing the rubber surge in 2016.

Commodities peaked in 2011 and entered a long-term bear market. After falling for 5 years, rubber began to rebound sharply in 2016. Rubber also bottomed out in 2016 and rebounded sharply.

In November 2016, rubber, which had fallen for five years, started to rise, and it soared for four months to around 22450.

So, why did rubber soar at the end of 2016?

The background of the surge is the supply-side reform in 2016, and the general rise in commodities. The varieties that rose first in 2016 are the varieties of supply-side reforms.

From the beginning to the end of 2016, the thread rose from the bottom of more than 1,600 to nearly 3,000 yuan, and the iron ore rose from nearly 300 to 600 yuan. The pattern of commodities in 2016 is a general rise.

From January to September 2016, rubber also rose from 10,000 to about 13,000.

In October 2016, with the cancellation of rubber warehouse receipts, China stopped production, and downstream stocks, rubber rose slowly to rapidly. The main factors driving the rise are:

Floods in Thailand have led to expectations for a substantial reduction in production.

The demand of the tire factory is good. The restocking of the industrial chain from downstream to midstream is still proceeding in an orderly manner.

Synthetic rubber is higher than natural rubber to become the main contradiction of the second stage of acceleration. (Synthetic rubber is 4000-6000 yuan higher than natural rubber. Natural rubber is expected to replace synthetic rubber).

The market generally expects that Thailand’s seasonal production cuts from March to March 2017 will be superimposed on the seasonal increase in Chinese demand.

At that time, other varieties had already increased greatly, and the funds were looking for low-end and long-term varieties, and rubber was selected.

Rubber started to rise rapidly in November 2016, and it has soared for nearly 4 months to around 22450. On February 15, 2017, the contract of Natural Rubber 09 hit a new high of 22450, and the contract 05 rose to 22310.

Comparing 2021 and 2016, we think there are many similarities in the background. Rubber does not need to be pessimistic. But the big rise requires the supply side to work hard

rubber

What are the current fundamentals of rubber?

On the supply side, it is quite normal. There is no big bullish (supply contraction). The cumulative output increased by 7% year-on-year. Lower than 2019.

In August 2021, rubber production was 1081.4 kilotons, 9.35% year-on-year, 6.98% month-on-month, and a cumulative total of 7102 kilotons, a cumulative year-on-year 6.97%.

In August 2021, Thailand’s output was 379 kilotons, 17.59% year-on-year, and -7.04% month-on-month, with a cumulative total of 2940 kilotons, a cumulative 12.03% year-on-year.

In August 2021, Indonesia produced 276.2 thousand tons, 6.23% year-on-year, 9.00% month-on-month, and accumulated 2012 thousand tons, which was -0.16% year-on-year.

In August 2021, Malay output was 45,000 tons, which was 1.12% year-on-year and 2.27% month-on-month. The total output was 341 thousand tons, which was 4.45% year-on-year.

In August 2021, Vietnam’s output was 160 thousand tons, which was 0.00% year-on-year and 60.00% month-on-month. The cumulative total was 609 thousand tons, which was -14.23% year-on-year.

In August 2021, China’s output was 108 kilotons, 10.32% year-on-year and 7.89% month-on-month, with a cumulative total of 449 kilotons, a cumulative year-on-year 43.19%.

In August 2021, rubber exports amounted to 894.9 kilotons, 3.56% year-on-year and 9.55% month-on-month, with a total of 6557 kilotons, a cumulative 8.39% year-on-year.

In August 2021, Thailand exported 329.2 kilotons, 15.51% year-on-year and 15.51% month-on-month, with a cumulative total of 2583 kilotons, a cumulative 1.09% year-on-year.

In August 2021, Indonesia exported 231.3 kilotons, 5.28% year-on-year, and 6.24% month-on-month, with a total of 1893 kilotons, a cumulative year-on-year 19.66%.

In August 2021, Malay exports were 80.2 kilotons, -15.76% year-on-year, and -1.23% month-on-month. The cumulative total was 690 kilotons, and the cumulative total was -2.63% year-on-year.

In August 2021, Vietnam exported 200 thousand tons, -5.53% year-on-year, 33.33% month-on-month, and accumulated 1013 thousand tons, accumulating 16.71% year-on-year.

In August 2021, rubber consumption was 784.9 kilotons, -2.81% year-on-year, 0.46% month-on-month, and a cumulative total of 6,247 kilotons, a cumulative 15.12% year-on-year.

In August 2021, China’s consumption was 505 thousand tons, which was -2.30% year-on-year and 2.02% month-on-month. The cumulative total was 3960 thousand tons, which was 17.66% year-on-year.

In terms of demand, the midstream tire industry is in good shape. The export is very good, the replacement is average or slightly worse, and the matching is better than 2020, but it is good to peak and fall.

Downstream heavy-duty truck sales have deteriorated rapidly, but with a high base, the deterioration has long been expected.

The supporting facilities are better than in 2020, but the favorable conditions peak and fall back.

In August 2021, truck sales were 210,000, a year-on-year decrease of 47.1%; from January to August, the cumulative sales of trucks was 3.111 million, a cumulative increase of 3.3%. Among them, in August, heavy truck sales were 51,000, a year-on-year decrease of 60.5%; from January to August, the cumulative sales of heavy trucks were 1.174 million, a cumulative increase of 8.1%, and the growth rate narrowed by 9.2 percentage points compared with the previous seven months.

In terms of exports, in terms of exports of all-steel tires, cumulative exports from April to July:

In 2021, 122,149,180,208 million tons.

In 2020, 90,111,137,1.7 million tons.

In 2019, 107,137,169,201 million tons.

Exports in 2021 will increase by 22% in 2020.

2021 will also increase by 3.5% over 2019.

In terms of semi-steel tire exports, cumulative exports from April to July:

In 2021, 769,941,141,32 million tons.

In 2020, 576,782,102 million tons.

In 2019, 668.51,051.26 million tons.

Cumulative exports in 2021 will increase by 29% compared to 2020.

2021 is also 5% higher than 2019.

In terms of domestic midstream demand, there are currently more disturbances. Expectations to rise in the later period.

As of September 17, 2021, the starting load of all-steel tires for tire companies in Shandong was 58.50%, an increase of 17.80 percentage points from last week, a decrease of 15.77 percentage points from the same period last year, and a decrease of 11.15 percentage points from the same period in 2019. The domestic tire company’s semi-steel tire operating load was 53.14%, an increase of 13.73% from last week, a decrease of 17.39% from the same period last year, and a decrease of 13.66% from the same period in 2019. All steel’s regional agents still focus on digesting market inventory.

Since August 26, the environmental inspection team went to Shandong and other five provinces for environmental inspections. As a result, the operating rate of the main production areas of all Chinese tire factories in Shandong has declined. The operating rate of heavy truck tires across the country has declined (declining demand for rubber stocks). As of September 10, 2021, the start-up load of all-steel tires of tire companies in Shandong was 40.70%, a decrease of 9.43 percentage points from last week, a decrease of 33.82 percentage points from the same period last year, and a decrease of 31.11 percentage points from the same period in 2019. The domestic tire company’s semi-steel tire operating load was 39.41%, down 15.25 percentage points from last week, down 30.88 percentage points from the same period last year, and down 27.70 percentage points from the same period in 2019.

The sharp drop in operating rate led to a sharp drop in rubber prices on September 8. However, the low operating rate can be seen as a negative for current demand, and it can also be seen as a potential positive for demand recovery in the future.

We infer that, in accordance with the history of rubber, in most cases, the market rebounded from September to October.

Translated by Google Translator from http://www.cria.org.cn/newsdetail/61918.html

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