According to the monitoring of business society, the natural rubber commodity index on May 22 was 37.81, the same as yesterday, down 62.19% from the highest point of 100.00 in the cycle (2011-09-01), and up 38.60% from the lowest point of 27.28 on April 2, 2020. (Note: the period refers to the period from September 1, 2011 to now)
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Figure 2: mainstream price trend of natural rubber since May 2022
According to the monitoring of business agency, during the week from May 16 to 22, the domestic natural rubber (standard I) in China’s East China market fluctuated slightly: the mainstream of the domestic market reported about 12720 yuan / ton on the 16th and 12750 yuan / ton on the 22nd, with a range of 0.24%. Among them, the tight supply of natural rubber is the main factor for the strong price in recent days.
Figure 4: K-bar chart of natural rubber market week in May 2022
Industry analysis: macro aspect: the impact of domestic public health events continues. Shanghai, which is greatly affected, is gradually resuming work and production, and the supply, circulation and sales of raw materials and finished products are gradually restored, especially in the next month; At the same time, the loose real estate policy has a positive stimulus to the improvement of market atmosphere and terminal demand.
Supply side: Thailand production area. Affected by rainy weather, the output of new rubber has remained low recently, especially the rainy weather in the Northeast production area will expand next week, affecting the output growth; In Vietnam, the cutting rate has reached 90%, and there has been a lot of rain in recent weeks, affecting the development of rubber cutting and the output of raw materials. In China’s domestic area, Yunnan has been fully cut, but the rainy weather in Banna continues this week, and the output of raw materials is affected, resulting in the shortage of raw materials in stock. It is reported that the price difference between regions is large. Some processing plants in Hainan take goods back to Yunnan for processing, but the dry rubber profit is thicker, the difference between dairy plants is suspended, and the cross provincial procurement volume is not much. The cutting in Hainan production area has not been started yet, and the delay is better than expected. It is reported that the cutting will be started from early June to early June, and there is too much rain before the cutting, which is conducive to the rapid increase of production.
Demand side: the impact of public health events is weakened, Shanghai and other important circulation areas are gradually returning to work and production, and the resumption of local and surrounding automobile enterprises will drive the rapid growth of raw material consumption and tire demand. Although the early heavy truck distribution and sales data show that all three major demands have weakened significantly, and the slow internal and external demand has led to heavy finished product inventory and great pressure to go to the warehouse of tire enterprises, in the short term, the gradual resumption of work and production in Shanghai is very good for the smooth arrival of imported rubber raw materials, warehousing and delivery of warehouse receipts. As for the commencement of tire enterprises, statistics show that the domestic tire market is mainly weak and stable, and the operating rate of tire enterprises is about 60-70%.
Inventory: according to the data of the exchange, on Friday (May 20), the natural rubber warehouse receipt was 25467 tons, an increase of 690 tons on a weekly basis; The total inventory of the exchange was 269347 tons, with a weekly increase of 2224 tons. No. 20 rubber warehouse receipt was 96002 tons, with a weekly increase of 6793 tons; The total inventory of the exchange was 102393 tons, with a week-on-week increase of 5686 tons. According to the statistical data, the storage of natural rubber in Qingdao increased: cut off from 5 to 16, the sample inventory of 16 natural rubber general trade warehouses in Yudao area was 297400 tons, an increase of 10000 tons or 3.48% over the previous period; The inventory of 17 samples in the free trade zone was 109100 tons, an increase of 10100 tons or 0.09% over the previous period. The total inventory was 406500 tons, with a week-on-week increase of 10100 tons.
In terms of import and export: there are few sources of goods to Hong Kong and few high-cost enterprises to take orders, which leads to the shortage of imported concentrated milk spot, the high price and traders’ covering the plate, which leads to almost transactions in the spot market. At the same time, it leads to the high enthusiasm of concentrated milk factories in China’s domestic production areas and the meager profits of dry rubber factories. According to the latest report of the General Administration of rubber of Cambodia, the country exported 79356 tons of rubber in the first four months of 2022, a year-on-year increase of 3%.
Figure 3: trend chart of mainstream international crude oil prices since May 2022
Macro analysis: on May 20, international crude oil futures rose slightly. The settlement price of the main contract of us WTI crude oil futures was US $110.28/barrel, up US $0.39 or 0.4%; The settlement price of the main contract of Brent crude oil futures was US $113.23/barrel, up US $1.02 or 0.9%. Tight supply is expected to boost oil prices against the backdrop of the Fed’s interest rate hike.
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Recent industrial hot spots: 1. China Automobile Industry Association disclosed on the 17th that in April 2022, the added value of China’s automobile manufacturing industry decreased by 31.8% year-on-year, and the retail sales of automobiles decreased by more than 30% year-on-year. From January to April, the fixed asset investment in China’s automobile manufacturing industry increased by 10.4% year-on-year. Compared with January to March, the growth rate slowed down by 2 percentage points year-on-year, 3.6 percentage points higher than the national fixed asset investment in the same period.
2. According to the latest data released by the National Bureau of statistics, the output of rubber tire covers in China in April 2022 was 64.707 million, a year-on-year decrease of 21.3%. From January to April, the output of rubber tire casing decreased by 8.4% over the same period of last year to 271023 million.
3. According to the latest data released by the European Association of automobile manufacturers (ACEA), the sales of new passenger cars in the EU fell sharply by 20.6% to 684506 in April due to the continued serious impact of supply chain problems on automobile production. In addition to the new crown pandemic year in 2020, this is the weakest result in April since its record.
4. The latest report released by LMC automotive shows that in April 2022, global light vehicle sales fell by an alarming 25% year-on-year to 5.4 million, and sales in all major markets shrank. Under the influence of the dynamic clearing and epidemic prevention policy, more than 20% of Chinese dealers were suspended due to closure; In the United States, inventories remain tight due to global supply problems. After seasonal adjustment, the annual sales volume decreased to 67 million vehicles / year. The supply of most major markets is still limited. This situation is exacerbated by China’s epidemic prevention and control measures and the conflict between Russia and Ukraine, which brings downward pressure on global sales activities.
5. The latest April report released by ANRPC predicts that the global natural rubber production is expected to increase by 13.6% to 941000 tons in April; The consumption of natural rubber is expected to increase slightly by 0.3% to 1.21 million tons. The report points out that although the market fundamentals are still conducive to the natural rubber market, the industry is still seriously affected by other external global events during the reference period. The world bank has lowered its forecast for global economic growth in 2022 from 4.1% to 3.2%, which is due to the uncertainty caused by the Russian Ukrainian conflict and China’s blockade, and may slow down the prospect of global economic recovery.
Future forecast: domestic new rubber production is low, the import volume is small, the inventory is low, and the downstream demand recovers slightly; The gradual resumption of work and production in Shanghai is conducive to the arrival, warehousing and delivery of imported rubber raw materials in Hong Kong. From the perspective of supply shortage, the natural rubber market is strong in the short term, and there is a great possibility of shock. In the medium term, it depends on the recovery of downstream demand.
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