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Tuesday, October 5, 2021

China – Monthly Summary: September Natural Rubber Prices Declined

Market Price

 

NR Futures Monthly Average Price

 

 

SHFE

most traded contract

(unit: RMB/mt)

INE

most traded contract

(unit: RMB/mt)

TOCOM

RSS

(unit: yen/kg)

SICOM

STR20

(Unit: $/mt)

Sep

13,621.00

10,854.00

194.14

1,618.00

Aug

14,287.00

11,326.00

219.22

1,727.00

Change

-666.00

-472.00

-25.08

-109.00

Change rate

-4.66%

-4.17%

-11.44%

-6.31%

Market Review

SCI NR price index was 1,018.87 points as of September 27, up 2.01 or 0.20% from August 31. In September, the average price of China’s natural rubber products went down. The relatively low inventory underpinned the natural rubber prices. However, China’s natural rubber prices kept dipping due to the tepid demand. On the whole, China’s natural rubber prices fluctuated downward in September.

As of September 28, the monthly average price of Shanghai natural rubber futures went down. Price of RU2201 averaged RMB 13,621/mt, down RMB 666/mt or 4.66% from a month ago. Prices of NR2111 averaged RMB 10,854/mt, down RMB 472/mt or 4.17% from a month ago.

In September, natural rubber futures prices went down. Shanghai natural rubber futures prices further dropped, hitting a new low from October 2020. Although the overall commodity market performed well, Shanghai natural rubber futures prices went down due to the tepid demand.

Market Forecast

Next month, natural rubber market price will fluctuate in the range of RMB 13,000-14,500/mt.

Supply: Next month, the output of new rubber will increase both in China and foreign producing areas. However, the increment in foreign new rubber will be limited, as the flood in Thailand will influence the feedstock release and the shipping transportation is tough. Accordingly, China’s natural rubber spot supply will continue to decline, underpinning natural rubber prices. In the short term, market participants need to focus on the weather.

Demand: Tire sales in China’s domestic market and in the export market will feel large pressure due to the insufficient containers and tough transportation. Moreover, the overall operating rate will be unstable due to external factors and the National Day holiday, so the demand for natural rubber will be sluggish. In the short term, the demand will give thin support to the natural rubber market.

On the whole, the overall natural rubber prices will slightly rebound in October. On the one hand, the bad weather will weigh down the natural rubber supply, giving support to the natural rubber prices. On the other hand, the demand for natural rubber will remain sluggish. Accordingly, the increment in natural rubber prices will be limited. Accordingly, it is estimated China’s natural rubber prices will hover at RMB 13,000-14,500/mt in October. Besides, market participants need to pay attention to the weather in major producing regions.

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