August 18 news
Since August, the Chinese natural rubber market has been fluctuating and rising. Data shows that as of August 17, the spot rubber price in China's natural rubber market is around 17,133 CNY/ton, an increase of 3.94% from 16,483 CNY/ton at the beginning of the month.
Supply during the peak production season has not met expectations, with strong cost support. Since August, frequent rainfall in Thailand and Vietnam has disrupted tapping, keeping Thai cup lump prices around the high level of 67 baht per kilogram, providing strong support for natural rubber from raw material costs. Continuous rain in Yunnan, China, and the approaching end of the tapping season in Hainan have limited latex output. Raw material supply outside of China is tight.
Inventory at the source continued to decline. As of August 16, the total inventory at Qingdao Port stood at 642,100 tons, down slightly by 29,000 tons from the previous period. Futures warehouse receipts on the Shanghai Futures Exchange also declined accordingly, easing visible inventory pressure and limiting the room for further price declines.
Demand is in the summer low season, with insufficient momentum for growth. As of August 14, the operating rate of semi-steel tire production at Chinese tire companies was 64.32%, and the operating rate of all-steel tire production at Shandong tire companies was 63.01%. Finished goods inventory remains high, with Chinese tire companies holding 40.2 days of all-steel tire inventory and 46.1 days of semi-steel tire inventory. Factories are mainly purchasing on an as-needed basis, with little willingness to actively replenish stocks.
Recent market expectations for a Fed rate cut have increased, leading to some recovery in risk appetite; the rise in international crude oil prices has pushed up the cost of synthetic rubber, making its price advantage apparent and indirectly boosting trading sentiment in the natural rubber market.
Outlook:
From a fundamental perspective, the short-term natural rubber market is expected to fluctuate within a range. The peak tapping season in Southeast Asia suppresses the upward potential of rubber prices, but rainfall in producing areas and concerns over El Niño could bring pulse-like fluctuations. China's port inventory is slowly decreasing, and low warehouse receipts provide bottom support; tire production remains in the off-season with limited increases in operating rates, and downstream rigid demand procurement is the main factor, making it difficult for demand to drive a trend of rising prices.
In September, tires enter the traditional peak season, and factory stockpiling is expected to drive an increase in production, potentially leading to a slight rise in rubber prices. At the same time, overseas monetary policies and crude oil prices will also have some impact on the natural rubber market.
