Monthly Summary: Apr 2024 Natural Rubber Average Price Rose Slightly
Market Review
In April, the average market price of RMB-denominated natural rubber edged up M-O-M. In April, the overall natural rubber price first climbed and then fell, mainly affected by changes in the expected supply of new rubber in China. Downstream tire enterprises purchased natural rubber for rigid demand in April, and the demand for feedstock remained stable. Yet, in terms of supply, in early April, drought in Yunnan caused yellow leaves in some areas, and rubber tapping work halted after starting, triggering bullish sentiment in the market. Therefore, prices of Shanghai natural rubber futures advanced, pushing up the spot price greatly. However, in mid-to-late April, the rubber tapping rate leveled up, in tandem with successive rainfalls in production areas. Players expected that the output of new rubber would rise, pressuring down the natural rubber price. Thus, downstream users mainly purchased feedstock when its price was low. The overall de-stocking of spot natural rubber was passable.
Market Forecast
In May, the overall natural rubber price is likely to fluctuate weakly. In terms of supply, in May, the global rubber tapping area may see a further rise. Especially, high feedstock prices may drive up enthusiasm in the production areas. Thus, the supply of new rubber is expected to ramp up. In terms of demand, affected by the May Day holiday and weak new orders, all-steel tire enterprises may face pressure from finished products. Thus, the operating rate of all-steel tire is anticipated to descend. Dull demand may hardly underpin the natural rubber price. On the whole, due to weak fundamentals in May, the natural rubber price may trend down.
It is estimated that SCRWF prices in Shanghai will probably fluctuate at RMB 12,800-13,800/mt in May. Players should pay attention to the output release of new rubber in China’s and overseas markets as well as the co-movement impact from macro policies.
Source: SCI
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