Introduction: Recently, among light-colored natural rubber types, the price spread between imported SVR3L and Chinese-made delivered SCRWF has gradually narrowed.
The price spread between SVR3L Mixed Rubber and SCRWF narrowed.
Since 2024, the price spread between SVR3L mixed rubber and SCRWF has continued to narrow. Recently, the prices of the two were basically the same, and the price of delivered SCRWF was lower than that of SVR3L. As of April 23, the price of SVR3L mixed rubber in the Shanghai market was RMB 13,450-13,500/mt for reference, and that of delivered SCRWF (excluding Yunxiang brand) was RMB 13,350-13,400/mt for reference. Judging from the level of the same period in previous years, the overall situation was consistent with the seasonal cycle pattern.
The reasons were as follows:
1. Delivered SCRWF prices weakened due to unsmooth market transactions.
The high-priced transactions of Laoquan milk were blocked, and the price weakened following the market.
The overall trading atmosphere in the SCRWF market was insipid. On the one hand, downstream enterprises mainly maintained basic purchases of feedstock due to stable orders. However, the processing profit of downstream enterprises was poor because it was difficult for finished products to rise. Therefore, downstream enterprises were more inclined to purchase Vietnam’s natural rubber with better cost performance. On the other hand, some SCRWF resources produced between 2009 and 2010 were sold to the market, and they were favored by some downstream enterprises because of the low prices, causing the transaction volume of currently delivered SCRWF to slip Y-O-Y.
2. Sales of Vietnam’s natural rubber performed well, supporting the price.
The overall destocking of Vietnam’s natural rubber was very impressive. It was understood that a warehouse in East China was fully scheduled to be shipped out until next week, and a warehouse in Ningbo had a weekly destocking volume of over 2,000mt. The sales of Vietnam’s natural rubber accelerated. Downstream enterprises replenished with low prices. The better cost performance of Vietnam’s natural rubber made some tire enterprises replace SCRWF with SVR3L mixed rubber, so the demand for SVR3L mixed rubber was robust. At the same time, the spot supply of SVR3L mixed rubber was tight, underpinning the price.
In the short term, the price of SVR3L mixed rubber will likely remain higher than that of SCRWF.
From the production peak and slack seasons of global natural rubber, China’s and Vietnam’s production areas are currently in the early stages of rubber tapping, and the output of field latex is low. The pressure on spot supply comes from domestic inventory. From the supply and demand perspective, the price of SVR3L mixed rubber will continue to be higher than that of SCRWF in the short term. However, in the medium and long term, players need to focus on the amount of new rubber added by the two.
