Natural Rubber Price Analysis (Jun 6)

Analysis of natural rubber market prices on June 6

Index

On June 6, the STR20 price index of natural rubber in Qingdao market was 1,700 US dollars/ton, up 10 US dollars/ton from the previous trading day.

Spot market

Supply:

Foreign: Thailand has more rain, and the output of new rubber has not increased significantly. The domestic and foreign futures market is weak, dragging the upstream raw material prices down.

Vietnam's production areas have basically started harvesting and gradually transitioned to the seasonal increase stage. Affected by the decline in the spot market during the week, the raw material purchase price weakened, but the range was limited.

Domestic: Weather interference still exists in the Yunnan production area, but the overall raw material volume has increased slightly month-on-month, and the phenomenon of rushing to harvest raw materials in processing plants still exists.

Affected by the decline in the current market, the center of gravity of the raw material purchase price continued to weaken during the week; the weather in the Hainan production area was abnormal, and the output of fresh glue showed significant fluctuations.

The output of raw materials increased month-on-month, but it was still difficult to meet the production needs of various processing plants. The glue purchase of local processing plants remained at an increased price.

Demand: Entering June, the high temperature weather increases, and the market demand for all-steel tire replacement may gradually increase. However, there are more cars and less goods, and the logistics freight rate continues to be low.

The demand for tire replacement by car owners is often delayed, which drags on the peak season of conventional terminal demand.

It is expected that as the price policies of various companies gradually become clear, agents will replenish stocks under the stimulation of sales policies, but the demand side is generally good, the supply of channels is sufficient, and the downstream channels continue to be out of stock. The current situation of replenishment is expected to weaken the transaction price.

Forecast for the future market

Today, the closing price of the main rubber contract has adjusted narrowly. From the fundamental point of view, although the domestic and foreign production areas are currently facing rainy rubber tapping, the supply increase in the production areas after the rain is expected to be strong, the price of raw materials has fallen sharply, and the cost support has been significantly weakened.

On the demand side, the overall order performance of tire companies at the beginning of the month was generally good, shipments were slow, and the pace of finished product destocking was slow. Recent geopolitical conflicts and the volatility of tariffs have caused high market volatility.

External capital sentiment has gradually occupied the core direction. Coupled with the increasing weakness of fundamentals, rubber prices are still expected to decline.

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