Market Review
Prices of RMB-denominated natural rubber spot resources edged up this week. Within this week, the price of Shanghai natural rubber futures was range-bound. Early this week, affected by commodity co-movement, the average price of natural rubber moved up overall. Yet, as seen from the dealing in the spot market, downstream users mainly purchased for rigid demand, limitedly bolstering the natural rubber price. With rainfalls in producing areas, the output of new rubber was expected to ramp up, so the natural rubber price fell back. The overall trading atmosphere remained tepid in the natural rubber market.
Market Forecast
Forecast: China’s natural rubber market will possibly be range-bound next week. In terms of supply, there will be more rainfalls in China’s and overseas producing areas, but the release of new rubber may be insufficient, underpinning the natural rubber price to some extent. However, the impact of drought climate may fade away gradually, so the natural rubber price may hardly see a notable increment. In terms of demand, the operating rate of the downstream industry is likely to remain stable. Yet, downstream users may mostly purchase natural rubber for rigid demand. Therefore, the natural rubber price may continue to move sideways in the short run. It is estimated that the weekly average price of SCRWF in Shanghai may be RMB 13,500/mt, and its mainstream prices may be in the range of RMB 13,200-13,700/mt next week. Players should pay attention to the climate and output release status in producing areas.
Supply: At present, China’s and overseas producing areas usher in the rainy period. Yet, affected by high temperatures and drought, the output release of feedstock may be limited, which fell short of expectations, supporting the natural rubber price from the bottom. In the short run, players should focus on the rainfalls in producing areas and feedstock output release status.
Demand: The operating rate at downstream tire enterprises may remain stable overall. However, the inventory at all-steel tire enterprises piled up, curbing the enthusiasm for purchasing feedstock. The demand may fail to underpin the natural rubber price.
