Commodity index: According to the monitoring of the business community, the natural rubber commodity index on October 21 was 34.73, down 0.17 points from yesterday, down 65.27% from the highest point of 100.00 (2011-09-01) in the cycle, and up 27.31% from the lowest point of 27.28 on April 2, 2020. (Note: Period refers to 2011-09-01 to now)

Figure 2: Natural rubber mainstream price trend since October 2022

Commodity market: According to the monitoring of the business community, the main spot market of natural rubber (Baodao full milk) in East China was about 11710 yuan/ton on July 21 (Friday), down 3.46% in the week, 3.38% month on month, and 18.47% year on year,; The current price is temporarily above 11702 yuan/ton on September 7, which is the second lowest price of natural gum in nearly 10 months from 2022 to now, and the second lowest price in the year since October 21, 2021. It has no traditional consumption peak season characteristics of “nine gold and ten silver” in previous years, and it has hit the confidence of many practitioners.

Figure 3: Weekly K Histogram of Natural Rubber Market in 2022

Industry: According to the monitoring of the business community, the global economy is weak and under great downward pressure. The expectation of economic recession and public health events have multiple impacts, and the overall demand is weak. Industry and supply side: Recently, the rainfall in Southeast Asia and Hainan has decreased, and the impact on rubber tapping has weakened. Yunnan has good weather conditions and normal rubber tapping. The global main production areas of natural rubber are still in the seasonal rubber production peak period and the supply is loose in the peak season. Demand side: Since the National Day holiday, some tire enterprises have been overhauling, and the commencement of work needs to be gradually restored. The current operating rate is still at a low level, and the tire inventory is high, the supply pressure is high, and the order volume and the purchase demand for natural rubber continue to be weak. In terms of imports and inventories, the arrival of new rubber at the port has gradually increased, and the domestic inventory has maintained a cumulative state. In terms of rubber substitutes, cis-1,4-polybutadiene rubber and styrene butadiene rubber have continued to decline in a weak way so far this month. At present, the price is close to that of natural rubber, which will promote the purchase demand of natural rubber to some extent. However, due to the decline in the commencement of tire factories, the downstream demand for raw rubber continues to be weak.

Recent hot spots:

1. According to Russian media on the 15th, a report released by the automotive industry research institute Standard&Poor’s Global Mobility recently showed that the European energy crisis has put the European automotive industry under great pressure on energy costs, and the energy use restrictions before winter may lead to the shutdown of auto factories.

2. According to the latest data released by the European Automobile Manufacturers Association (ACEA), the sales of passenger cars in the European Union increased by 9.6% to 787870 in September, two consecutive months of growth, and 4.4% in August. However, this growth is mainly due to the low comparison base in September 2021, when the shortage of semiconductors hindered automobile production; In the first three quarters of 2022, the European passenger car market shrank by 9.9% to 6.78 million vehicles. This is reflected in the performance of most countries, with all major markets in the region facing losses during the nine month period. Italy saw the largest decline (- 16.3%), followed by France (- 11.8%), Germany (- 7.4%) and Spain (- 7.4%).

Figure 5: Comparison Chart of Annual Spot Market Trend of Natural Rubber from 2020 to 2022

Future market forecast: worries about the future economic prospects will continue to affect the futures trend. The trend of natural rubber is weak due to the multiple distribution of public health events, poor industrial demand and excess supply of raw rubber; China’s economic tone is stable, and the domestic rubber production area will stop cutting seasonally at the end of next month, which will support the market of natural rubber to some extent. To sum up, it is expected that the probability of natural rubber will remain volatile, with short-term weakness as the main factor.