Weekly Summary: NR Spot Prices Saw A Big Drop (Nov 6 – Nov 12)

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1 Market Price

NR Weekly Average Price
SHFE

RU2101

(unit: RMB/mt)

INE

NR2101

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(unit: RMB/mt)

RSS

(unit: yen/kg)

Oct 30

-Nov 5

15,177.00 10,593.00 227.42
Nov 6

-Nov 12

14,308.00 10,497.00 220.08
Change -869.00 -96.00 -7.34
Change rate -5.73% -0.91% -3.23%

Natural Spot Market Price

Mainstream Market NR Weekly Average Price

(unit: RMB/mt)

Market Shanghai Shandong
Grade SCRWF SVR 3L RSS 3 STR20 mixed SCR10
Oct 30

-Nov 5

14,225 14,380 19,050 12,035 13,330
Nov 6

-Nov 12

13,290 13,280 17,960 11,470 12,670
Change -935 -1,100 -1,090 -565 -660
Change rate -6.57% -7.65% -5.72% -4.69% -4.95%

From November 06 to November 12, SCI NR price index moved up from a week ago. On November 12, the index closed at 1,109.40 points, up 27.48 points or 2.54% from November 5. The spot price moved down significantly. As investors reduced positions of RU2101, NR futures dropped from a high level. The spot market followed the trend and also moved down. Now, the natural rubber fundamentals haven’t changed much. The investment capital for NR futures becomes even more active. The coexistence of bearish and bullish factors has become the major driver for the market.

This week, NR futures on SHFE first dropped and then rose. As the dominant futures contract rolled from RU2101 to RU2105 and investment capital exited the market, NR futures on SHFE fell for three days in a row. RU2101 dropped to as low as 13,780 points, which made the futures price return to what we saw in mid-October. On November 11, data regarding the industries was released, and it indicated that the demand continued improving. As a result, NR futures stopped dropping and rebounded. On November 12, weekly average price of RU2101 was RMB 14,308 points, down RMB 869/mt or 5.73% from a week ago. Weekly average price of NR2101 was RMB 10,497/mt, down RMB 96/mt or 0.91% on a week-over-week basis.

  1. Market Forecast

Next week, NR futures on SHFE will keep fluctuating upwards. Recently, the dominant natural rubber futures contract has been rolling from RU2101 to RU2105. Since November of last year, NR futures on SHFE had been falling. The recent rebound is more about the recovery of the oversold natural . The natural rubber fundamentals haven’t changed a lot. The rubber work is about to stop in China’s rubber producing areas. This year’s reduction of SCRWF is a key point in supporting the futures market and also facilitates the hype in the market. However, the social inventory stays high, and the ample supply depresses the magnitude of futures rebound. On the demand side, the automobile market developed rapidly in October, and the favorable data effectively supported the natural rubber market. Besides, China’s export trade is getting better, which allows the operating rates at tire companies to stay at a relatively high level. The demand for tires is improving. NR futures on SHFE will fluctuate upwards in the near future. Market players are advised not to buy high. It’s better for them to watch closely before starting any trade.

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