The Upstream and Downstream Situation of Rubber is Difficult to Change, and the News is Stimulating the Market（March 14, 2025）

The recent rubber spot price decline sentiment is relatively strong, and rubber prices began to enter the downward channel from Wednesday, and the market trading is cautious, downstream tire companies maintain a high production level, but the actual selling of downstream finished products is less than expected. Rubber tire factories have a weak momentum for destock, to a certain extent, which is not conducive for the downstream enterprises on the raw material procurement sentiment, so the actual transaction is limited.

Supply side: the support impact during the cut-off period is weakening, and the support on the cost side is limited

Foreign production areas: At present, most areas of northeast Thailand have entered the rubber cutting period, the output in southern Thailand continues to shrink, the dry content is reduced, and the price of raw material cup rubber remains high under the tightening of supply. Dragged down by the demand for thick latex, rubber price declined.

Thailand's major factories maintain the basic inventory level of raw materials for 2-3 months, and the production rate is around 8%. Overseas orders are as usual, mainly for China and local sales. And the theoretical production profit of Thailand's STR20 narrowed month-on-month. During the cycle, the price of raw material rubber cup rose, the Thai baht appreciated with the factory cost pressure increasing. But overseas demand did not improve, the factory quotation fell, and the STR20 theoretical production profit narrowed month-on-month, showing a loss. Vietnam's production areas have entered a period of cessation, and the price of raw materials is not available for the time being. Domestic production areas: Hainan and Yunnan production areas are in the suspension period, and the price of raw materials is not available.

However, as far as the current situation in the production area is concerned, the weather and temperature in the domestic production area are acceptable, and rubber trees grow relatively well. Some industry operators predict that this year, rubber in domestic producing areas is expected to be cut normally without the influence of special weather conditions, and the support of raw materials has begun to weaken, and the support of the cost side is relatively limited.

Demand side: downstream enterprises maintain a high level of production, and finished product sales are less than expected

This week, the operating rate of semi-steel tires in China was 80%. During the week, most enterprises operated steadily, and the selling situation of some enterprises with a relatively large proportion of exports was under-performed, and the output was affected by the change of specifications, which dragged the operating rate slightly lower during the week.

The operating rate of China's all-steel tires was 69%, and most companies maintained stable production scheduling during the week, and the new production capacity of individual enterprises was gradually released, driving a slight increase in the operating rate. As far as the current production rate of tire enterprises is concerned, the overall high level is maintained, but the end market demand is weak, the finished product inventory of tire enterprises is slowly digested from the bottom up, and the actual replenishment volume may be limited to a certain extent.

News: Tariffs and the Two Sessions

The convening of the Two Sessions this week, macro events, in the short term, have a relatively positive impact on the overall commodity sentiment, but whether the policy side can further exert force still depends on the implementation of specific policies. At the same time, the uncertainty of Trump's tariff policy will also have an impact on the risk aversion of market funds.

As far as the current situation is concerned, the fundamental perspective maintains a wide range of fluctuation, and the recent macro has a greater impact on the linkage of the commodity market.