Weekly Summary: Natural Rubber Prices Changed Climbed (Sep 6-Sep 12, 2024)

Market Review

Prices of RMB-denominated natural rubber spot resources perked up this week. Within this week, prices of Shanghai natural rubber futures climbed, driving up the spot price accordingly. Recently, affected by the typhoon “Capricorn”, heavy rainfalls hit the main producing areas of natural rubber, curbing the rubber tapping work. Besides, in some areas, processing plants faced power outage and unit shutdown. Thus, players worried about the sluggish output release of natural rubber, strongly bolstering the overall price. As seen from downstream demand, last week, many downstream tire enterprises purchased natural rubber when its price was low. Thus, this week, with natural rubber prices rising, high cost dampened downstream purchasing enthusiasm. Therefore, the trading atmosphere was average in the spot natural rubber market, with tepid dealings.

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Market Forecast

Forecast: China’s natural rubber market may fluctuate at highs next week. In the short run, the market price of natural rubber may continue to be bolstered by low supply. On the one hand, affected by rainfalls in producing areas, the output release of new field latex may be slow. Thus, the feedstock price is likely to remain firm, leading to a high cost. On the other hand, imported shiploads arriving at ports may be limited, so the spot inventory of natural rubber in China may continue to be low. As seen from the demand, due to the average end market, tire enterprises may show thin appetites for purchasing feedstock on high cost pressure. Meanwhile, the expected resource outflow from the National Food and Strategic Reserves Administration may pose pressure on the natural rubber price. Therefore, in the short term, the natural rubber price is estimated to hover at highs. It is estimated that the weekly average price of SCRWF in Shanghai may be RMB 15,350/mt, and its mainstream prices may be in the range of RMB 15,000-15,700/mt. Players should pay attention to the status of resource outflow from the National Food and Strategic Reserves Administration, as well as the impact of macro commodity co-movement on the natural rubber market.

Supply: In the short run, rainfalls in China’s and overseas producing areas are likely to disturb the output release of new field latex. Affected by abnormal weather, players may worry about the status of supply release. Meanwhile, in September, the natural rubber resources flowing to the warehouse may be limited. The spot inventory in China may remain low.

Sentiment: Due to average end demand, downstream tire enterprises may show thin purchasing appetites on high cost pressure. Thus, the demand may hardly see increments. Besides, it is heard that the rigid demand in the internation

Source: SCI99