June Natural Rubber Business Is Very Difficult To Do Market Hopes To Change

- Jul 03, 2019-

First, the rubber rise and fall list

According to the price monitoring of the business community (100ppi.com), there were 0 kinds of commodities that rose in the rubber price rise and fall list in June 2019, and there were 4 kinds of commodities falling. The main commodities that fell were: styrene butadiene rubber (-10.28%), natural rubber (-5.70%), and butadiene rubber (-3.96%).

Second, the commodity index

The natural rubber commodity index on June 30 was 33.33, which was the same as yesterday, which was 66.67% lower than the highest point of 100.00 points (2011-09-01) in the cycle, which was 18.40% higher than the lowest point of 28.15 points on November 25, 2015. (Note: Cycle refers to 2011-09-01 to date)

Third, the market trend

2019 natural rubber in the first half of the market, can be described as ups and downs. In the first quarter, it experienced a sharp increase of nearly 10% in February. In March, it fell back to the starting line. In April, it rebounded 4% in April and then started the down mode. Until the last trading day, the customs announced the “mixed rubber classification”. The policy began to rise. In May, the price of rubber continued to rise. The mixed rubber inspection, high temperature and drought and pests had great impact. In particular, the shortage of new rubber supply caused concern about the supply of the market. The price of natural rubber had risen by 10%. The subsequent sentiment fell and the price of rubber dropped. More than 3 points. In June, the business data of the business (100ppi.com) showed that the average price of natural rubber in Hainan Baodao in June was 11920 yuan/ton on the 1st and 11240 yuan/ton on the 30th. The decline was 5.7%. Among them, the highest price of this month was 12020 yuan/ton on the 11th, the lowest price was 11240 yuan/ton on the 30th, and the maximum amplitude was 6.49%. The rubber price fluctuated downward this month and the trend was weak.

Fourth, factor analysis

Gum production and export: The high temperature and drought in the rubber production area at home and abroad have been alleviated this month. At present, they are all in the rubber production period, but the rubber production is at a relatively low level. For example, in Thailand, although the export volume has increased from the previous month, it has fallen sharply year-on-year, and its price has remained at a relatively high price. The higher cost has led to lower production in some rubber producing factories. According to data released by its customs, in May 2019, Thailand's natural rubber (including tobacco sheet rubber, standard rubber, latex, Zou rubber, composite rubber and others) exported about 265,800 tons, and the export volume increased by 6.87% from the previous month. It fell 11.91%. China: In May 2019, the import volume of natural and synthetic rubber was 507,000 tons, down 8.98% from the previous month and down 21.88% from the same period of last year. The import volume was greatly reduced, and the price of imported rubber was firmer. The domestic rubber production area increased in June and the drought eased. The tapping rubber returned to normal, but because of the severe drought caused by the previous drought, the supply chain was less than last year, and the supply chain was low. The current spot price was firm but the futures price was weak. The whole milk profit margin was small. The purchase price is high, the profit is low, and the start of construction is affected.

Demand and inventory: On the demand side, due to factors such as economic, environmental supervision and backward technology, tire companies continued to survive the fittest in the first half of 2019. In June, the tire factory started normal, the tire export dropped significantly, and domestic consumption entered the off-season. The demand did not improve much. For example, China Automobile Dealers Association: the automobile dealer inventory warning index was 50.4% in June 2019, down 3.6 points from the previous month. The percentage point decreased by 8.8 percentage points year-on-year. The automobile inventory warning index is still above the warning line. Moreover, according to statistics, China's tire production and export volume have declined for 10 consecutive months, and demand is not optimistic. In terms of inventory, the destocking process brought about by the 3L rubber classification inspection in Vietnam continued; the data showed that the stocks outside the bonded area continued to decline recently, and the stocks of the exchanges remained at a high level. On June 30, the inventory remained high at more than 420,000.

Related Products: On June 30, the butadiene rubber commodity index was 32.75, which was the same as yesterday, which was 68.02% lower than the highest point in the cycle of 102.40 points (2011-09-25), which was higher than the lowest point of 23.74 points on February 4, 2015. 37.95%, the butadiene rubber commodity index from 2019/6/13, decreased by 5.62% in 18 days. On June 30, the styrene-butadiene rubber commodity index was 33.01, which was the same as yesterday. It was 68.14% lower than the highest point in the cycle (2011-09-08), which was 16.19 points higher than the lowest point of 28.41 on January 19, 2016. %, styrene-butadiene rubber commodity index has been decreasing by 10.299% in 27 days since 2019/6/4. . (Note: Cycle refers to 2011-09-01 to date)

related policy:

Hybrid glue identification: On April 28, the General Administration of Customs issued a notice requesting that the imported rubber that has been imported through the 40028000 tariff code should be inspected as a mixture of completely natural rubber and synthetic rubber. Although the "Notice" was released in February, the impact on the market continued to ferment, Vietnam's 3L plastic imports decreased, 3L plastic domestic prices were firmer; it is said that Chinese manufacturers have used domestic latex to replace 3L in some processes. However, the current replacement is not large, the market is still closely watching the customs inspection.

Boosting automobile consumption: On June 6, the National Development and Reform Commission, the Ministry of Ecology and Environment, and the Ministry of Commerce jointly formulated and developed the industry [2019] No. 967 issued the "Implementation Plan for Promoting the Renewal and Renewing of Key Consumption of Key Consumer Products (2019-2020) Notice (2019-2020), it is proposed to resolutely break the barriers to passenger car consumption, and it is strictly forbidden to introduce new restrictions on automobile purchases. Local governments that have implemented automobile purchase restrictions should explore the classification and use policies of vehicles inside and outside the congested area according to the specific conditions of the city. In principle, no restrictions on purchases outside the congested areas; vigorously promote the use of new energy vehicles, local governments should not impose restrictions on new energy vehicles, purchase restrictions, the implementation of the policy should be canceled, and once again "guarantee" the growth of car sales. This is the fourth time in a month that the relevant state departments have introduced relevant policies to boost automobile consumption.

Glue countries discuss: On June 22-23, during the 34th ASEAN Summit, Indonesian President Jokawi and Thai Prime Minister Prayut Chan-o-cha met in Bangkok to discuss palm oil (CPO) Trade with rubber. Indonesian President Jokowi believes that when millions of rubber farmers are unable to face the pressure of market development, government intervention is indeed necessary. He affirmed the Indonesian and Thai and Malaysian rubber export control policies. This will have a positive impact on increasing the price of natural rubber on the world market. He called for Indonesia, Thailand and Malaysia to work together to improve trade and investment performance to increase the prosperity and well-being of millions of farmers who depend on the crop industry for their livelihoods.

India's tire tax rebate: India's major tire companies have been under pressure due to unfavorable factors such as rising raw material costs and stagnant demand due to slower local car sales. The Indian government is very worried about the gradual increase in China's tires, which will bring a small impact to the local tire industry. On June 25, 2019, the Indian government issued a message to impose a five-year countervailing duty on new 16-inch inflatable radial tires from China. It is mainly all-steel tires from China, which lists nearly eight tariff items, ranging from 9.12% to 17.57%.

V. Forecast of the market outlook

Natural rubber analysts of the business community believe that the recent high prices of raw materials in domestic and foreign production areas have led to a decline in the profit of processed products, and the supply is relatively tight. Imported rubber inspections continue to affect the import of 3L plastics, and the domestic destocking process continues; however, Sino-US trade negotiations have a good situation and focus on closely following the tire export situation. The current traditional peak season and poor downstream demand have brought great pressure on raw material factories and distributors. For example, the market said that “the natural rubber business in June is really difficult to do”, and hope that the natural rubber market in the second half of the year will be improved.