Rubber is less likely to rise and will still maintain a weak oscillation pattern

According to the interviewed analysts, from the external macro perspective, the Fed’s interest rate hike expectations are heating up, resulting in a bearish overall operating environment for commodities. From the perspective of industry fundamentals, there is bottom support on the supply side, and insufficient recovery power on the demand side. Therefore, the rubber market outlook will continue to be weak.

Recently, under the influence of rising expectations of external interest rate hikes, energy and chemical products have been under pressure as a whole. After nearly a month of consolidation, rubber futures chose to continue to break through. The RU2305 contract fell below the 12,000 yuan/ton mark. Analysts said that it is difficult for rubber to rise in the short term, and the market will continue to be weak.

"From a fundamental point of view, the main domestic production areas are in the cut-off season, and the main overseas production areas continue to reduce production, forming a bottom support for raw material prices, and the price difference between glue and cup glue has dropped slightly." Zhu Jintao, an energy analyst at Everbright Futures, told Futures Daily According to the reporter, the current phenological conditions in the main producing areas of Yunnan and Hainan are good. It is expected that the domestic crops will be successfully harvested in late March and fully harvested in April.

Zhu Jintao said that the operating rate of tires showed a correction for the first time after the year. Last week, the operating rate of all-steel tires decreased by 0.66 percentage points from the previous month to 69%; the operating rate of semi-steel tires decreased by 0.06 percentage points from the previous month to 74%. The processing of early orders has released most of the production capacity, and the tire production in January and February has increased year-on-year. At the same time, the transmission of terminal demand is blocked. In the case of insufficient follow-up orders, the support for high-level start-ups is insufficient, especially overseas demand has weakened. Under the expectation that overseas orders will resume waiting and watching, the pressure on rubber imports has increased, and tire exports have slowed down.

"Affected by the car purchase tax halving policy and the withdrawal of new energy vehicle subsidies, the auto market is facing greater pressure. The terminal demand of tire companies has weakened, the digestion speed of finished products has slowed down, and the mood for raw material procurement is cautious. The pressure on the rubber spot market continues. "Gao Linlin, an energy analyst at Guotai Junan Futures, said that the overall inventory of tire companies is relatively low at present, and production scheduling is actively driving the capacity utilization rate of sample companies to continue to run at a high level. However, due to the impact of environmental protection policies, individual enterprises are slightly restricted in starting work, and the overall sample start-up may fluctuate slightly, and there is limited room for improvement in the later period.

It is worth noting that the increase in the operating rate of tire companies has not brought about the depletion of rubber inventory. The inventory in Qingdao has continued to increase to a five-year high since the beginning of the year, the outbound volume has slowed down, and the inflection point of inventory has been delayed. Zhu Jintao said that the current inventory of finished all-steel tires in domestic tire companies is 32 days, which is flat week-on-week; the inventory of finished semi-steel tires is 31 days, which is flat week-on-week.

"From the data released by the General Administration of Customs on March 7, it can be seen that from January to February, my country imported 1.322 million tons of natural and synthetic rubber (including latex), a year-on-year increase of 10.8%. And the domestic social inventory continues to rise and has reached a relatively high level. Therefore, high inventory is also the leading factor in the decline in rubber." Zhu Meixia, a senior energy analyst at Shanjin Futures, added.

Looking forward to the market outlook, Zhu Meixia believes that from the perspective of the industry's own fundamentals, under the background of slowing demand orders and poor terminal transmission, the downstream tire industry has limited room for improvement, the impact of the supply side on prices is gradually weakening, and the spot side remains strong. . In the short term, rubber prices may show a weak trend, but the futures price is close to the domestic rubber abandonment line, and it is expected that there will be limited downward space.

"On the whole, there is bottom support on the supply side, insufficient recovery momentum on the demand side, and short-term high inventory suppresses the rise in rubber prices. In the later stage, we need to pay attention to changes in market funds caused by external macroeconomics, phenological conditions in major domestic production areas, and overseas follow-up orders." Zhu Jintao explain.

In Gao Linlin's view, the RU2305 contract can still take the lead in realizing the rapid return of non-standard futures, while the uncertainty of the RU2309 contract has increased. Based on this, rubber may continue the weak pattern. The short-term market lacks favorable guidance, the market confidence is insufficient, and the fundamentals remain bearish. The probability of being boosted by the macro is low. Therefore, for most chemicals, there may be a price depression in the second quarter. "There is no upward drive in the short term, and the Silicon Valley Bank incident is fermenting, and the market risk appetite will go down again. During the previous wave of rubber, arbitrage participation was more cautious, and during this wave of decline, there is a phenomenon of increasing positions. This also shows that investors' confidence in the market outlook is slightly insufficient." She predicts that short-term rubber prices are less likely to rise, and the market outlook will still maintain a weak oscillation pattern.