According to the monitoring of the business community, the natural rubber commodity index on September 20 was 35.98, up 0.29 points from yesterday, down 64.02% from the highest point of 100.00 (2011-09-01) in the cycle, and up 31.89% from the lowest point of 27.28 on April 2, 2020. (Note: Period refers to 2011-09-01 to now)
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Figure 2: Trend of mainstream price of natural rubber in September 2022
According to the monitoring of the business community, the market of domestic natural rubber (Standard 1) in the East China market in mid September was volatile and upward: on the 11th, the main report in the East China market was about 11706 yuan/ton, and on the 20th, the main report was 12132 yuan/ton. The highest price in the first half of September was 12132 yuan/ton on the 20th, and the lowest price was 11702 yuan/ton on the 7th, with the maximum amplitude of 3.67%. According to the data of the business community, the main spot market of natural rubber in East China (Hainan Island) has dropped sharply from 13748 yuan/ton in the beginning of 2022 to the first ten days of this month. The price of 11702 yuan/ton on September 7 has fallen more than that of 11910 yuan/ton on July 22 and is at the lowest level of the year; After the Mid Autumn Festival holiday, natural rubber futures rebounded relatively strongly, and spot rubber prices rose 3.67% to about 12132 yuan/ton. In general, the current traditional “golden nine and silver ten” peak consumption season, the production and marketing data has a certain supporting effect on the industry, but it is still in the early stage, the general trend of strong supply and weak demand has not been reversed, and the natural rubber market is likely to be strong and volatile in the short term.
Figure 3: Trend of International Crude Oil Mainstream Prices in the Last Three Months of 2022
Macro: In the middle of September, international crude oil rose first and then fell. On the 20th, international crude oil futures closed lower, with the settlement price of the main contract of US WTI crude oil futures at US $83.94/barrel, down 1.42 US dollars or 1.66%; The settlement price of the main contract of Brent crude oil futures was 90.62 dollars/barrel, down 1.38 dollars or 1.50%. The expectation of the Federal Reserve’s interest rate increase has kept the US dollar strong and depressed the valuation of crude oil and other commodities; In addition, raising interest rates to curb inflation also triggered fears of economic recession, which depressed fuel demand.
Figure 4: Weekly K Histogram of Natural Rubber Market in 2022
Industry analysis: the data of the business community shows that the macro and policy aspects of the economy continue to stabilize, and futures rebound; Crude oil has continued to fall by 11.41% since the beginning of this month. The stronger US dollar will continue to bring downward pressure on oil prices in the coming week. On the supply side, the seasonal supply peak season of “Jinjiu”, heavy rain in some parts of Southeast Asia, the domestic production of glue is relatively normal, and the price of glue in the glue production area has rebounded recently. On the demand side, after the Mid Autumn Festival holiday, the tire enterprises resumed production, and the demand for raw materials increased. Although the supply pressure of downstream tire enterprises is still large, and the cis polybutadiene rubber is at a relatively high level, the styrene butadiene rubber continues to fluctuate and decline. At present, the price is similar to that of natural rubber, which will promote the purchase demand of natural rubber to a certain extent. It is expected that the materials for the tire factory to open before the National Day will be stable; In terms of sales data, the production and sales of passenger cars were strong, and commercial vehicles increased slightly. The improvement of downstream data promoted the improvement of enterprise commencement data: data showed that as of September 16, the operating load of all steel tires of tire enterprises in Shandong was 50.07%, down 3.59 percentage points from last week and 8.43 percentage points from the same period last year. The starting load of semi steel tires of domestic tire enterprises was 56.27%, 5.96 percentage points lower than that of last week, and 3.13 percentage points higher than that of the same period last year. On the inventory side, the natural rubber sample inventory in the Qingdao Free Trade Zone increased rapidly, and the general trade warehouse of natural rubber in Qingdao increased slightly. In terms of import and export, data shows that in August 2022, China’s imports of natural and synthetic rubber (including latex) will be 590000 tons, up 0.1% year on year; From January to August, China’s natural and synthetic rubber (including latex) imports totaled 4.567 million tons, up 5.1% year on year.
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Hot spots in the near future: 1. According to the report of Thai media on September 15, the Thai meteorological department predicted that because the monsoon trough crosses the upper part of the north, the upper part of the northeast, and the southwest monsoon prevails in the Andaman Sea, the south, and the Gulf of Thailand, heavy rain will occur in parts of the north, northeast, central, Bangkok and its surrounding areas, eastern and southern areas, which may lead to flash floods, especially in hillside areas and marsh areas near waterways. During the period from the 17th to the 20th, the monsoon trough crosses the north and northeast, and the southwest monsoon prevails in the Andaman Sea and the Gulf of Thailand, which will lead to continuous rain in Thailand. There will be heavy rain in a large number of areas in the north, northeast, central, Bangkok and its surrounding areas, and in the east and south. 25 provinces are at risk of flooding, including 9 provinces in the north, 10 provinces in the northeast, 2 provinces in the middle, and 2 provinces in the west 2 prefectures in the eastern region.
2. According to the LMC Automotive report, the global light vehicle sales in August increased by 18% year on year to 6.9 million vehicles; After seasonal adjustment, the annual sales volume increased to 94 million vehicles, maintaining an increase for the fourth consecutive month and hitting a new high this year. Although the month on month performance has improved, the cumulative sales volume since the beginning of the year is still 3.8% lower than the same period last year. The Chinese market continued to lead the recovery trend, and the annual sales volume after seasonal adjustment soared to a record level with the support of temporary reduction and exemption of purchase tax. In North America and Europe, seasonally adjusted annualized sales again highlighted the continuing impact of supply disruptions.
3. According to the latest data released by the European Automobile Manufacturers Association (ACEA), the sales volume of passenger cars in the EU finally recovered to 650305 units in August, ending a 13 month decline. However, this result is still far below the level before the COVID-19-19 pandemic. All major EU markets have made positive contributions to the growth of the region. Italy (+9.9%), Spain (+9.1%), France (+3.8%) and Germany (+3%) have achieved steady growth.
4. According to the latest data released by the National Bureau of Statistics, in August 2022, China’s output of rubber tire casings was 72.265 million, down 2.2% year on year. From January to August, the output of rubber tire casing decreased by 5.6% to 56422.1 million pieces compared with the same period last year.
5. According to the latest data released by the National Bureau of Statistics, China’s synthetic rubber output in August 2022 was 682000 tons, an increase of 5.6% year on year. The cumulative output of synthetic rubber from January to August was 5.197 million tons, down 3.5% year on year.
Figure 5: Comparison of annual prices of natural rubber from 2020 to 2022
Future market forecast: under the circumstances of the repair rebound of futures, the resumption of partial operation of tire factories and the expectation of the peak sales season of passenger cars, the power of short term small upward movement of natural rubber still exists, but under the premise that the large demand does not improve, the possibility of large upward movement of natural rubber is unlikely, the probability rate will still maintain the trend of range shock, and the possibility of short-term strong power is large.
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