The price of natural rubber hit a record high

The price of natural rubber ushered in a rapid rise after the long holiday of "October", and the monthly increase has so far exceeded 30%. On October 28, the price of SHFE rubber rose by 5.99% throughout the day and closed at 16,535 yuan, the highest price of the day, a new high in the past three years.

The price increase of natural rubber stems from the expected production cuts caused by factors such as climate and epidemic. The industry generally believes that whether the price can continue to rise will be closely related to the supply side. When interviewing downstream companies recently, a reporter from Shanghai Securities News learned that the tire demand is steadily improving, and the downstream industry has gradually resonated, and the future rubber price is expected to continue to rise.

Downstream industry chain demand is improving

One of the main applications of rubber is the tire industry, which has become the first industry in the downstream industry chain to resonate with rubber prices.

In addition to passenger cars, heavy trucks also have a high demand for tires. Heavy trucks were once considered to be a cyclical industry, but changes in market demand scenarios, changes in user groups, and new needs in infrastructure have caused their cycle to be greatly extended. Heavy truck manufacturers have even broken away from the cycle and stepped into the growth enterprise circle. Layer momentum.

An executive of China National Heavy Duty Truck confirmed this point: “The market has begun to label the heavy-duty truck industry as a weak cycle. At this stage, the company's downstream dealers are in strong demand, and heavy-duty trucks are in short supply.” The executive believes that heavy-duty trucks will be in a long-term boom The cycle undoubtedly supports rubber prices.

According to data from the China Automobile Association, in September 2020, the sales volume of heavy trucks was 150,600, an increase of 80% year-on-year. Among them, as the market's largest segment of heavy trucks, tractors sold 75,300 units that month, accounting for 50% of the total sales of heavy trucks, an increase of 93% year-on-year, 13 percentage points higher than the overall growth of heavy trucks. Affected by this, tire production has increased significantly. According to data from the National Bureau of Statistics, China's rubber tire production in September was 81.561 million, a year-on-year increase of 15.4%.

Industry analysts of Zhongtai Securities said that from the downstream end, the recovery of the automobile industry and the surge in tire consumption are a major factor that has boosted the price of natural rubber in the near future.

Industrial resonance appears

The rubber industry chain has a momentum of industrial resonance, and the supply of downstream branch products exceeds supply will further support rubber prices.

Wanma shares said that rubber prices continued to rise after bottoming out this year, and the price of cable materials rose year-on-year. The company's low- and medium-voltage cable products were in short supply. The response method adopted was to increase production capacity through technical renovation of old equipment and establishment of new medium and low-voltage conductor plants .

Zhenan Technology, which produces vibration-isolated rubber bearings for buildings, said that regarding the impact of rubber price fluctuations on product costs, the company will make price adjustment decisions based on market conditions and project conditions.

The specialty rubber market is also "rising."

The research report of Baichuan Yingfu shows that the supply of nitrile rubber in the market is scarce, and the downstream inquiry atmosphere is strong. Some terminals are affected by the sporadic shortage of raw materials, which stimulates market inquiries for other alternative brands. In addition, due to the impact of environmental protection policies, nitrile rubber producers and downstream operations have been affected to some extent. At present, the inventory of nitrile rubber manufacturers is low and the market supply is scarce. It is expected that the domestic nitrile rubber market will be stable and improving in the short term.

Nanhua Futures analysts said that nitrile rubber, driven by the demand for medical gloves and other products, has recently seen a significant price increase, and its insufficient supply has shifted part of the demand to latex. The current profit of latex is better than that of delivery product full latex, which further amplifies the impact of demand in the case of reduced production of raw materials. The market's expectation of rising raw material prices and the lack of full latex raw materials still exists. This situation is also reflected in the Thai raw material end. The current local rubber price has risen to 65 baht/kg.