Rubber Prices Rise Amid Supply Constraints

Index

On July 18, the STR20 price index of natural rubber in Qingdao market was 1795 USD/ton, up 15 USD/ton from the previous trading day.

Market analysis

Futures market:

Spot market supply: 

Abroad: Thailand has more rain, rubber tapping is hindered, domestic and foreign futures have risen strongly, and the trend of rubber cycle has stabilized; dry rubber factories have increased the price of raw materials for production, and the price of cup rubber has increased significantly; the overall climate in Vietnam's production area is stable, the supply has grown steadily, the purchase price of glue has remained stable, the supply of glue resources is sufficient, and the purchasing rhythm of processing plants is relatively stable.

Domestic: The continuous rainfall in the Yunnan production area has hindered the normal development of rubber tapping, the supply of glue is relatively small, and the purchase price of raw materials remains high; the precipitation disturbance in the Hainan production area has increased, the release of raw material production on the island has been significantly restricted, the mood of increasing the price to rush to collect raw materials has heated up, and the purchase price of raw materials has risen slightly.

Demand: It is understood that the domestic replacement market for semi-steel tires has performed steadily, the market has been moving normally, and high temperature weather has continued in many regions, which has slightly boosted terminal replacement. However, the current market inventory is high, and the main focus is on digesting existing inventory.

For all-steel tires, the weather is hot and the high temperature weather continues. The terminal demand is expected to recover. There is no obvious performance at present. Merchants at all levels of the market mainly digest the previous inventory. Some brand agents continue to promote sales within the month according to their own inventory situation.

List of futures and spot prices

Market forecast

Today, the main rubber contract futures market fluctuated strongly, and the spot price followed the upward center of gravity of the market, boosting market sentiment. Rainfall continued in Southeast Asia, and rubber tapping in the production area continued to be blocked, and raw material prices were high; some terminal enterprises controlled production, and the pressure of natural rubber social inventory accumulation continued to exist, but the short-term rainy weather in the production area and the continued improvement of macroeconomic sentiment were still the dominant logic, and rubber prices may remain strong.

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