In the past few years, copper, zinc, steel in China has been used as a financing tool. But now the rubber financing on stage was triggered market concerns about the rubber stocks surge.
2012-2016 depth research and development of China’s rubber industry outlook report “shows that as China’s rubber stocks push to 3-year high of the culprits, motives and principles of financing transactions not complex based on China’s economic growth rate this year will compared to last year, a substantial increase in the expected transaction participants unanimously found that the prices of commodities and related assets this year corresponding rise; spreads space has become an active power source such transactions. The rubber trade center in eastern China, Qingdao, rubber stock has been as high as 328,000 tons.
However, rubber traders face is not better tomorrow: the potential risks to economic growth slow further shrink rubber consumption threatens their highly anticipated profits. Car sales growth is lower than earlier expected, demand for rubber from the tire market will inevitably being dragged down.This will undoubtedly make rubber price pressure lower, thereby forcing investors to stop out: sell the stock to avoid greater losses. Rubber analyst said: “The potential risk factors will be in the second and third quarter of this year, is becoming increasingly severe and serious collateral valuation bank undercutting.”
According to the statistics of the Association of Natural Rubber Producing Countries (ANPRC) as early as last year’s total rubber production and imports has been higher than the demand of nearly 340,000 tons, it is not difficult to see that the Chinese rubber industry in the current situation of oversupply. Rubber imports grew by 18% to reach 3.4 million tons. Of hoarding the rubber in Qingdao total valuation is close to one billion U.S. dollars (about 6.2 billion yuan). Dealers said, this is the highest since 2010 inventory, inventory of 145,000 tons compared to April last year, this year’s data is higher than doubled. Shanghai Futures Exchange for futures contract delivery rubber stock of 102,000 tons.
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Storage period short into the problem
Mortgage transactions, the borrower by letter of credit to buy goods, and collateral to bank loans, guarantee to pay off within 3-9 months.Secured rubber loan problem is that the rubber can the Stock 6 months, and then it must be checked again to ensure quality, especially the kind used for making tire rubber. Rubber backlog of longer, the greater the risk of quality deterioration brought devaluation.
Bank to lower rubber loan risk, usually only lend to borrowers collateral equivalent to the the rubber value of 50% of the amount; For perishable goods like metal, this is not easy, it will lend at least 80% of the amount of the value of the collateral. Rubber and food such perishable goods, banks will ask the the professional collateral manager to examine the inventory and monitoring market.
According to research Waterhouse 2012-2016 depth research and development prospects of China’s rubber industry outlook report “, the rubber total value of all banks in Qingdao backlog reached $ 260 million, half of the rubber is the collateral for the loan. The borrower can only get half of the amount of the value of the collateral, bank loans, bank loans totaled 67.3 trillion yuan in 2012, the sea a chestnut.
Major banks at home and abroad, such as: Industrial and Commercial Bank of China, Standard Chartered Bank, ANZ Bank rushed to carry merchandise mortgage business, but they are rubber secured temporarily to determine whether or not to accept. Bank rubber collateral “special treatment” virtually increase the risk of default of the borrower; Thai, Indonesia’s top rubber supplier also began to be vigilant, trading and fixed buyers only, and requires a down payment.
Car sales not to force
China’s auto sales to 19.3 million units in 2012, a year-on-year growth of 4.3%, only half of the forecast at the beginning of the China Automobile Production Association (CAAM). 2012 economic growth is slow, the tension in the Sino-Japanese relations to combat the demand for Japanese cars, compared to the same in 2009 and 2010 30% of automotive sales increment bleak.
China Automobile Production Association predicted that 2013 car sales growth of 7%. If auto sales continue no breakthrough in the slow-growth, tire manufacturers had to go before the new round of procurement to dispose of the existing backlog of inventory. Despite the increase in China’s import and export volume in January 2013 and a surge in the amount of new borrowing, but economists believe that the data influenced by early February Chinese New Year should be a rational interpretation of the January incremental.
Research Waterhouse rubber industry analysts predict 2013 rubber consumption will reach an increase of 5%, 7% lower than last year’s forecast value, the 2012 actual value yet to be announced. Analyst, said: “2013 China’s rubber demand will continue to grow, but the price is still under pressure, because the rubber supply will increase more than the increase in demand.”
Translated by Google Translator from http://news.cria.org.cn/3/13400.html
