Analysis of the causes of the current trend of natural rubber
What is the reason for the recent increase in natural rubber prices?
The recovery of natural rubber supply is lower than expected
Due to the outbreak of the new crown pneumonia epidemic this year, frequent severe weather and obstruction of cross-border labor mobility, the natural rubber output in Southeast Asia in the first three quarters has declined year-on-year. Different degrees of decline. The latest report from the Association of Natural Rubber Producing Countries (ANRPC) shows that in September 2020, the natural rubber output of the main producing countries in Southeast Asia was approximately 1,049.3 million tons, a year-on-year increase of 5.2% and a month-on-month increase of 2.68%; the total natural rubber output from January to September totaled 7,797.1 Thousand tons, a cumulative year-on-year decrease of 7.3%. Among them, in September 2020, China's natural rubber production was approximately 111.4 thousand tons, a year-on-year decrease of 2.7%, and a month-on-month increase of 11.4%; the total natural rubber production from January to September totaled 426.5 thousand tons, a cumulative year-on-year decrease of 19.4%. At the same time, the cumulative production of natural rubber in Thailand fell by 2.04%, Indonesia fell by 13.18%, Malaysia fell by 11.54%, Vietnam fell by 5.06%, and India fell by 3.31%.
Since the National Day, China’s Hainan region and Southeast Asia have encountered typhoons and rainfall, which has hindered rubber tapping activities. The purchase price of glue has been rising, and the recovery of natural rubber production has been slow. In addition, the COVID-19 epidemic occurred in Qingdao after the National Day, which hindered economic activities in Qingdao, especially as China's natural rubber trade flow center, which had a certain impact on the rubber market. In addition, large-scale demonstrations have broken out in Thailand and Indonesia, the main natural rubber producing countries, and geopolitical risks seem to be on the rise. Accordingly, the trigger for this sharp wave of rising prices is still driven by factors such as weather, epidemic situation, and political situation, resulting in a large amount of funds pouring into the rubber market in the short term. However, the impact of these factors is short-lived. The epidemic in Qingdao is basically under control. Typhoons mostly occur in October, and typhoons rarely occur in November and December (only one occurred in 2003 and 2004 in the past two decades. ).
The recovery in demand for natural rubber is better than expected
China’s COVID-19 epidemic has been brought under control, and various automobile stimulus policies or measures have been introduced one after another to promote further recovery in the domestic automobile market. China's midstream and downstream demand data for natural rubber were promising in September. China's automobile production and sales increased by double digits year-on-year. Sales of heavy trucks and excavators in China increased by 63% and 64.8% respectively year-on-year. The latest data released by the China Association of Automobile Manufacturers shows that in September 2020, China's automobile production and sales were 2.524 and 2.565 million units respectively, a year-on-year increase of 14.1% and 12.8% respectively, and a month-on-month increase of 19.1% and 17.3% respectively. From January to September, China The cumulative production and sales of automobiles were 16.957 and 17.116 million units respectively, a cumulative year-on-year decrease of 6.7% and 6.9% respectively.