Supply and Demand Easing Situation Expected to Strengthen, with Upward Pressure on Natural Rubber Market
Supply and Demand Easing Situation Expected to Strengthen, with Upward Pressure on Natural Rubber Market
1ã The peak production season in Southeast Asian production areas is approaching, and supply is expected to strengthen
At present, the production areas in Thailand are in a seasonal increase stage, and the expectation of raw material supply is relatively strong. After entering November, the rainfall weather in Thailand has slightly eased compared to October, further weakening the impact on rubber cutting operations. The price of cup rubber has rapidly dropped to 36.55 Thai baht/kg since early November, a relatively low state. However, under the stimulation of low costs, the enthusiasm of processing factories for purchasing and stocking goods is high, although the profit of finished product processing has narrowed, But the overall stocking rhythm is still obvious. As of November 9th, the price of rubber raw materials was 43.8 Thai baht/kg, a decrease of 3.2 Thai baht/kg compared to the end of October, with a decrease of 6.81%. The price of cup rubber hit the bottom and rebounded to 38.55 Thai baht/kg, further narrowing the price difference between cup rubber and rubber. In the context of the peak supply season, there is a clear signal of material volume release, and cost support is gradually showing signs of weakness.
At the end of the fourth quarter, demand is gradually showing signs of fatigue
At the end of October, some regions in Shandong and even across the country were affected by public health and safety incidents, affecting overall domestic consumption and logistics transportation. As of the end of last week, the operating rates of all-steel and semi-steel radial tire factories in China showed varying degrees of decline. As of recently, the frequency of public health and safety incidents in Dongying and other places has eased, and most tire processing factories have gradually resumed work. There is a slight consumption in finished product shipments, but overall shipments are relatively limited, Finished product inventory remains at a high level. The superposition is currently at the end of the fourth quarter, and the overall rebound in downstream construction is expected to be relatively limited, highlighting the weak demand side.
2ã Supply is on the rise, demand is weak, and the price of natural rubber is rising weakly
From a macro perspective, the Federal Reserve's interest rate hike is gradually coming to fruition, and the market atmosphere is tending to ease. Under the stimulation of short delivery, closing positions and leaving the market, as well as opening positions and buying goods, the spot trading atmosphere of Thai mixed stock is good, which provides support for the market's rise in the short term. However, domestic public health incidents have repeatedly occurred, the national economy has recovered less than expected, the industry's wait-and-see attitude continues to heat up, and the expectation of increased supply in foreign production areas continues to strengthen. However, the recovery process on the demand side is slow, and it will temporarily remain sluggish. It is difficult for the supply and demand sides to form strong support for prices, and it is expected that the risk of the price of rising and falling back of natural rubber will strengthen.
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