Natural Rubber Price: May-June Trends
Market review: In May, the price of natural rubber rose first and then fell. The overseas tariff policy was relaxed in the early part of this month, boosting the macro market sentiment.
In addition, the increase in rainfall in the Thai production area disturbed the rubber tapping, and the raw material procurement price remained high. Synthetic rubber was strongly pulled and transmitted to natural rubber due to equipment problems.
After the concentrated outbreak of positive sentiment, the rubber price continued to rise. However, under the influence of tariff policies, the weakening trend of demand accelerated, the inventory of tire companies continued to grow, and the demand side was expected to perform poorly.
The macro news side supported and dragged coexisted, and no effective driving point was formed. The rubber price began to decline after rising.
The supply peak season is coming, and the cost side support is weakening
The overall rainfall in the Thai production area increased month-on-month, and the output of new rubber continued to be poor.
The domestic and foreign futures market fell sharply, dragging the upstream raw material prices down. Vietnam's production areas have basically entered a full-scale tapping state, and the output of raw materials has increased. However, the increase in precipitation has affected the tapping work in some areas.
The pace of fresh rubber production has been limited, and affected by the decline in futures and spot prices, the production profits of Vietnamese rubber processing plants have been squeezed, and the sentiment of purchasing raw materials at high prices has cooled down, and the price of raw materials has fallen slightly from the high level.
Yunnan production area = Rainy weather has relatively frequent effects, the release of glue production is slow, the overall supply of raw materials is tight, and the resistance to the purchase of raw materials by processing plants still exists.
The futures and spot markets have plunged sharply due to the influence of capital sentiment, dragging the price of raw materials to fluctuate and fall. The precipitation in Hainan production area has increased relatively, and the rainfall mostly occurs in the evening.
Combined with the influence of high temperature weather, the overall output of glue is still significantly suppressed. In addition, dragged by the decline in futures and spot market prices, local processing plants are cautious about purchasing raw materials at high prices, and the center of gravity of raw material prices has declined.
Weak demand and high inventory trend are difficult to change
Due to the "May Day" holiday, the number of private car trips increased, which was beneficial to the market demand for semi-steel tire replacement.
However, it was learned from retail stores that the sales volume was limited, the domestic market was flat, and as low-priced sources gradually shifted to the market, the market transaction price fell. From the perspective of the ex-factory price policy of enterprises within the month, the downward trend continued.
As agents purchased goods, low-priced sources flowed into the market, and the circulation price of channel sources fell. At present, the production capacity of enterprises is sufficient, the market inventory is high, and the demand increase is not obvious. The weak market operation continues.
Coinciding with the "May Day" holiday, some businesses also have a short holiday, which has a certain impact on sales. During the holiday, some sections of the road were congested, freight trucks were blocked, and logistics transportation volume weakened, which was negative for the market demand for full-steel tire replacement.
In addition, at the beginning of the month, some tire factories launched price reduction promotions, and the market had a wait-and-see expectation, waiting for the factory's price policy guidance.
The market transaction price is stable but weakening. For some companies that are on the sidelines, the ex-factory price policy is gradually becoming clear. Compared with last month, companies have introduced a certain degree of profit-sharing policies, which are lower than the expectations of the industry, and are mostly tied to the purchase task volume.
The market purchase speed is flat. In order to speed up the delivery rhythm, the agents have stabilized their quotations. There is room for negotiation in actual delivery. After calculation, the market channel transaction price is weakening.
Forecast for the future market: Under the collision of supply and demand, natural rubber is still expected to weaken
In May, the natural rubber market is looking for a balance in the multi-dimensional game between the fundamentals of supply and demand and macroeconomic policies.
In June, according to the current phenological conditions, the pace of increase in the main production areas at home and abroad has gradually accelerated, and the cost support of raw materials has weakened.
Terminal procurement is still mainly based on demand. Under the weak supply and demand situation, the price of natural rubber is still expected to fall.
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