[Natural Rubber]: Rubber Weekly Review (November 7)

Figure 1: Shandong market price of STR20 MIX Figure 2: Zhejiang market price of ordinary bulk imported from Thailand

dry rubber

At the end of this week, the main rubber contract stopped falling and rebounded and began to show an upward trend. However, judging from the current rubber fundamentals, there is no obvious support. The impact at the macro level at both domestic and foreign countries is more obvious in the short term. Stimulated by the recovery at the macro level, the entire bulk market has improved to varying degrees, and rubber has followed suit. At the supply and demand level, the weather conditions in the upstream production areas have gradually improved, and the support for raw material costs has gradually become weak. In terms of downstream demand, channel inventory is sufficient, terminal demand is poor, and actual shipment results are average. Most of them are mainly made up for shortages. In addition, it is difficult to raise prices at the agent level, and most of them continue the previous price policy. In the absence of significant changes in fundamentals, there is relatively limited room for rubber growth in the short term, so beware of falling expectations.

natural latex

This week, the offer price on the natural latex spot market in China has slightly increased. Traders are more enthusiastic. The futures market fluctuated and rose, which boosted the market atmosphere. The raw materials and cost market at home and abroad showed a rebound trend. Support on the cost side increased. When the spot resources of imported rubber in the sales area were relatively free, the spot offers of the holders mainly increased slightly. However, downstream product companies remained cautious in purchasing into the market, and most of them negotiated price reductions. It is difficult to increase the price of real orders.

Market outlook forecast:

1. The cut-off period for raw materials in China's production areas is approaching, and winter storage in the main production areas should be continued;

2. It is expected that the operating rate of tire sample companies in the next week may continue to be weak;

3. The inventory in Qingdao, China continues to be removed from the warehouse;

4. Exchange rate, Federal Reserve interest rate cuts, etc.