The end of the year is approaching, and the concentrate latex market is rising rapidly

The end of the year is approaching, and the concentrate latex market is rising rapidly

Towards the end of the year, the concentrated latex market ushered in the last wave of higher market in 2023, laying the basis point for the opening market to be at a high level in 2024. As of December 27, 2023, the price of ordinary bulk imported from Thailand in the Zhejiang market was 11,100 yuan/ton, an increase of 750 yuan/ton or 7.25% compared with the quotation of 10,350 yuan/ton on December 20 in the same period last week, which has successfully made the closing price of 2023 the high point at three consecutive years.

1. Domestic production areas stopped cutting, foreign production areas are not prosperous in the peak season, and cost side support is strong

Domestic production area: the domestic Yunnan production area has been in the cutting suspension period, the price of latex is not yet, the current concentrated latex products are mostly sold in finished product inventory that was be put into the tank, but the processing plant is reluctant to sell, with no willingness to sell at a low price. The domestic Hainan production area has reached the closing stage, due to the rapid cooling and rainfall, some areas in Hainan have begun to enter the stopping cutting state, the overall output of raw material latex is less, and the superimposed processing plant has basically entered the final stage of winter storage, and the raw material procurement sentiment is acceptable, supporting the price of raw materials to rise significantly, and the cost side support is strong.

Foreign production areas: the southern production area of Thailand is currently in the peak season according to the normal rubber tapping season, but the recent rainy weather has aggravated, and floods have occurred in some areas, resulting in that southern Thailand made little profit during current peak season , and the release of rubber production is less than expected, and the leaves in some parts of the north have begun to turn yellow in recent days, and it is expected that Thailand as a whole will gradually enter the stage of production reduction in January 2024. In the short term, the price of Thailand latex will maintain a high trend, the purchase price will remain high, and the production cost will have a strong support for the offer of the Thai processing plant.

2. Towards the end of the year, downstream stocking and buying up sentiment led to a slight improvement in demand

Towards the end of the year, some downstream enterprises began to plan to start construction and inventory planning at the beginning of 2024, during this period, the spot price of concentrated latex showed a significant upward trend, the downstream "buy up, not buy down" sentiment heated up, the downstream inquiry buying sentiment improved, and the actual transaction price also began to move up compared with the previous period.

Although there are no obvious highlights in the overall demand performance of concentrated latex this year, and the procurement frequency is mostly maintained the procurement strategy of purchasing only when there is need, in the case of the rise in the concentrated latex market, the downstream on-demand replenishment has also brought support to the concentrated latex market to a certain extent.

3. Supply support is still the main reason for the rise. Downstream demand is still wait for discussion

From the perspective of the entire rubber environment, with the landing of the supply side storage news, the recent market witnesses a warming atmosphere, the news stimulus is expected to weaken. However, the upstream offset still exists, the domestic production areas are gradually stopped cutting, foreign production areas are not prosperous in the peak season, and the lack of supply are all still support the raw material quotation to remain high. The demand side sentiment has driven the procurement rhythm to improve slightly, but it is still in the off-season of consumption, the terminal demand is always difficult to increase, the finished product inventory of manufacturers is under pressure, the finished product inventory is higher, and the enterprise starts or is under pressure to weaken. However, up to now, the tight spot supply situation in the domestic sales area is difficult to change in the short term, coupled with the high cost of replenishment, the holders are reluctant to sell, and the bullish sentiment is heating up, and the concentrated latex may remain high in the short term.