Natural Rubber Prices Decline Weak Consolidation

Index

On September 19th, the STR20 price index of the natural rubber market in Qingdao was $1,825/ton, down $5/ton from the previous trading day.

Market Analysis

Futures Market:

Spot Market

Supply:

Overseas: Rain disturbances in northeastern Thailand eased month-on-month, leading to a slight improvement in new rubber release. Factories showed no willingness to increase prices, lacking the momentum for further price increases on the raw material side, resulting in a month-on-month decline in average prices.

Continued rainfall in southern Thailand led to firm rubber prices. Weather in Vietnam's producing areas improved compared to last week, reducing disruptions to tapping operations, but the market has not yet returned to normal. Inventories in producing areas remain low, and pressure on the flow of domestic raw materials persists. Processors maintained steady procurement to ensure order fulfillment, supporting firm prices.

Domestic: Weather conditions in Yunnan's producing areas were favorable, and rubber output remained stable. Raw material prices fell slightly at the end of the week, accompanied by a decline in futures and spot prices. Continued irregular rainfall in Hainan's producing areas intensified the impact on tapping operations. However, a lack of orders and profit margins for processors, coupled with a downward trend in futures and spot prices, further weakened the raw material market.

On the demand side: It is understood that the full-steel tire market has ample supply, but terminal demand is weak, channel destocking is slow, and the market is slow to restock. In the short term, the focus will remain on destocking and replenishing shortfalls. The semi-steel snow tire market continues to operate normally, but channel restocking is slow. Snow tires are in ample supply, and dealers are regularly replenishing their positions, waiting for the terminal market to destock.

Futures and Spot Price List

Market Forecast

Today, the main rubber futures contract saw weak fluctuations, with spot market quotations falling in line with the market. Holders are reluctant to sell at low prices, while downstream companies are restocking at low prices. Rainy season and typhoon weather continue to disrupt rubber tapping in producing areas, weakening cost support.

Downstream tire manufacturers have largely completed pre-holiday inventory replenishment, and significant reductions in natural rubber spot inventories are unlikely. Rubber prices are expected to remain weak in the short term.

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