Data show that the natural rubber commodity index on October 27 was 43.07, up 1.18 points compared with yesterday, 56.93% lower than 100.00 points (2011-09-01), and 57.88% higher than 27.28 points, the lowest point on April 2, 2020. (Note: period refers to 2011-09-01 to now)

Figure 2: natural rubber mainstream price trend in October 2020

As shown in Figure 2, natural rubber futures and spot prices have been on the road since October, and continued to be strong on the 28th. Shanghai Rubber: on the 28th, Shanghai Rubber had a strong opening and easy trading. The 01 contract closed at 16535 yuan / ton, up 935 yuan / ton, up nearly 1000 yuan within the day, and the market was generally bullish. Spot rubber: according to the data of natural rubber (standard 1) in East China monitored by the business agency, the mainstream quotation of domestic Baodao whole milk market was about 11792.5 yuan / ton on October 1, and 15262 yuan / ton on 28th, up 29.4% so far this month,. Among them, the mainstream quotation on 28th was 15262 yuan / ton, which was about 626 yuan / ton higher than that on 27 days, with a daily increase of 4.54%.

According to the survey conducted by business agencies, the tapping situation in Hainan and Yunnan, the main production areas of domestic rubber, is different. Hainan is suffering from continuous typhoons. Typhoon No.16 and No.17 have passed, typhoon No.18 is at the right time, and typhoon No.19 and No.20 are on the road. The strong wind and rain weather has seriously affected the production of Xinjiao. The weather in Yunnan is normal. Although the temperature is lower than that in previous years, tapping is normal. Because the rubber price has been rising for many days, and the price has reached the peak in two years, the long silent high price has boosted the enthusiasm of rubber farmers. After the latex is sent to the factory, there is not much work shipment, and the price is high. At present, the rubber price is at a high level, the market transaction is not much, and the price adjustment is frequent. Some of them are bullish and do not cover the market Out.

From the perspective of major global producers, the weather, epidemic situation and lack of labor have affected the supply of new gum seriously. Therefore, it is inevitable and certain to reduce the production of natural rubber. According to the association of natural rubber producing countries (ANRPC), the total output of natural rubber from January to September totaled 7797.1 thousand tons, down 7.3% year-on-year. Among them, in September 2020, China’s gum output was about 111.4 kilotons, a year-on-year decrease of 2.7%, and a month on month increase of 11.4%. From January to September, the total output of natural rubber was 426.5 thousand tons, with a year-on-year decrease of 19.4%. Meanwhile, the cumulative production of natural rubber in Thailand decreased by 2.04%, Indonesia by 13.18%, Malaysia by 11.54%, Vietnam by 5.06% and India by 3.31%. The annual production reduction is no longer a suspense, and the statistical data are very obvious. To make matters worse, many Southeast Asian countries are also suffering from typhoon and heavy rainfall, which has seriously affected the output of new rubber. Meanwhile, the rubber farmers and market traders are unable to cover their plate, which leads to the continuous rise of prices. According to Thailand on October 28, Nakorn tangavirapat, director of Thailand’s rubber administration, said that rubber production was reduced due to typhoon Sadr and heavy rainfall, and merchants and farmers hoarded rubber for profit, which made rubber price rise to 72 baht per kilogram in a week. It is estimated that the rubber price will exceed 80 baht / kg and affect the delivery of rubber futures.

In sharp contrast to this decrease in supply, the demand of downstream tire enterprises increased and the operating rate stabilized at more than 70%. For example, in Shandong Province, as of October 23, 2020, the start-up load of all steel tires of tire enterprises in Shandong Province was 75.32%, slightly increased by 0.63% compared with last week and increased by 9.92% compared with the same period last year. The operating load of semi steel tire of domestic tire enterprises was 70.81%, 0.6% higher than last week and 3.36% higher than that of the same period last year. Customs data show that in September, China’s tire export volume maintained double growth on the same month, and the foreign trade export situation was better. In addition, China’s economy has gradually recovered, and automobile production and sales are in large volume. In September, China’s automobile production and sales increased by 19.1% and 17.4% month on month, 14.1% and 12.8% year-on-year. Affected by the growth of automobile sales, tire production increased greatly. Domestic tire market maintained a good development momentum, and demand stimulation supported rubber price rise. At the same time, rubber price rose, increasing tire enterprises This month, Guizhou tire, aoles tire, Wanli tire, Fengshen tire, Shandong Zhongchuang tire, Fangxing rubber and other companies announced to adjust their tire product prices in October and November, with an increase range of 2-4%.

To sum up, the current natural rubber production reduction is not only inevitable, but also more severe in the recent typhoon and heavy rainfall in Southeast Asia and Hainan. It is not ruled out that the price of natural rubber will continue to rise rapidly due to the serious stock up in the supply side or trade links and the lack of market circulation. However, after a large upward rush for many consecutive days, the natural rubber price is likely to be adjusted by shock.