Natural Rubber Prices: June 4 Analysis

Analysis of natural rubber market prices on June 4

Index

On June 4, the STR20 price index of the natural rubber Qingdao market was 1,700 US dollars/ton, up 30 US dollars/ton from the previous trading day.

Spot market

Supply:

Foreign: Thailand's overall rainfall increased month-on-month, and the output of new rubber continued to be poor. The futures market at home and abroad fell sharply, dragging the upstream raw material prices down. There were more precipitation weather disturbances in Vietnam's production areas, and the rubber tapping work in the main production areas in the south was not smooth.

The rhythm of new rubber production was limited, but affected by the decline in futures and spot prices, the raw material price fell slightly from the high level.

Domestic: There was more rainfall in the Yunnan production area, the rubber output was limited, and the resistance to the purchase of raw materials by the processing plant still existed.

The futures and spot markets plunged sharply due to the influence of capital sentiment, dragging the raw material prices down; there was continuous rainy weather in the Hainan production area, and the raw material output on the island showed a significant decline, and the short-term supply performance continued to be tight.

Demand: It is understood that at the beginning of the month, the performance of corporate orders was differentiated. Some maintenance companies gradually resumed work. Considering the impact of insufficient orders, some companies postponed the resumption of work after the Dragon Boat Festival. The overall output was limited.

The price policy of some companies gradually became clear. Some semi-steel tire companies reduced prices to stabilize shipments.

Forecast for the future market

The closing price of the main rubber contract today showed a narrow upward trend. From the current supply and demand of rubber, the peak season of the production area on the supply side is approaching, the center of gravity of raw material prices is downward, and cost support is weakening; downstream demand is weak, the transaction atmosphere is weak, Qingdao inventory destocking is less than expected, and the support for rubber prices is limited.

The market is bearish. It is expected that the short-term rubber price will be weak and volatile, and the support for continued rise is limited.

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