Natural Rubber Spot Prices Fluctuated Declined

1. Rubber Spot Market Analysis

This week, rubber spot prices continued to fluctuate, with a slight decline. High overseas raw materials and continued destocking of spot inventories are supporting natural rubber prices. Macroeconomic factors intensified this week, weakening trading sentiment in the spot market. In the absence of a strong driver, rubber prices are expected to remain in a narrow range in the short term.

This week, natural rubber latex spot market quotes fell slightly, with traders offering active bids. Futures prices fluctuated downward, dragging down market sentiment. Upstream processing plants lowered their shipping prices, and spot quotes from traders in the sales area followed suit. Downstream product manufacturers saw improved inquiries, with many pushing down prices and purchasing on demand. Contracts were concluded through negotiation.

Market Forecast:
1. Rainy weather will continue to disrupt demand, leading to a gradual release of raw materials.
2. Operating rates at sample tire manufacturers are expected to improve in the next cycle.
3. Inventories in Qingdao, China continue to decline.
4. Exchange rates, Federal Reserve interest rate cuts, and other factors.

2. Natural Rubber Supply Analysis

2.1. Thailand Production Area

Rain disturbances in northeastern Thailand weakened month-over-month during the period, leading to a slight improvement in new rubber release. Factories showed no willingness to increase prices, lacking the momentum for further price increases on the raw material side, resulting in a month-over-month decline in average prices. Continued rainfall in southern Thailand kept rubber prices firm. Factories maintained raw material inventories ranging from 30 days to 60-90 days, maintaining normal production and long-term shipments. International tire manufacturers were slow to purchase, while domestic buying activity was subdued, resulting in average overall transaction volume.

2.2. Vietnam Production Area

This week, weather in Vietnam's production areas improved compared to last week, reducing disruptions to tapping operations. However, the situation has not yet returned to normal. Inventories in the production areas remain low, and pressure on the flow of domestic raw materials persists. To ensure delivery of orders, processing plants maintained steady procurement, supporting firm prices.

2.3. Yunnan Production Area

Yunnan's peak rainfall season gradually came to an end this week, with weather in key producing areas gradually improving. Tapping conditions have significantly improved, and supply in Yunnan is gradually increasing. However, strong demand for raw materials from processing plants has supported raw material purchase prices. Raw rubber prices remain high.

2.4. Hainan Production Area

Irregular rainfall continued in Hainan this week, further impacting tapping operations and significantly tightening the market for raw materials. However, due to a lack of orders and profit margins for processing plants, and a downward trend in futures and spot prices, further weakening market sentiment, processing plants are less motivated to replenish raw materials.

3. Natural Rubber Cost and Profit Analysis

3.1. International Production Area: Thailand

Thailand's STR20 theoretical production profit margin narrowed month-on-month. The average price of raw cup rubber fell month-on-month during this period, easing production cost pressures at upstream plants and narrowing the STR20 theoretical production profit margin.

3.2. Domestic Production Area: Hainan

Currently, increasing precipitation on the island has disrupted raw material production, significantly reducing the supply of fresh rubber. This week, concentrated milk processing plants are limited in the number of days they can operate. However, in the spot market, concentrated milk spot prices face significant resistance to price increases. Local processing plants continue to see declining profit margins, dampening their enthusiasm for rubber collection and production.

4. Analysis of Natural Rubber Demand

4.1. Downstream Dry Rubber

China's semi-steel tire production capacity utilization rate is 73%. China's full-steel tire production capacity utilization rate is 66%. Tire companies maintained stable production during the cycle, with shipments remaining generally stable for most companies. Some companies experienced a slight slowdown in foreign trade sales, leading to a slight increase in inventory, but this had a minimal overall impact, allowing for a moderate alleviation of stockouts for some specifications.

4.2. Concentrated Milk Downstream

I've heard that Wenzhou foaming plants are operating at approximately 40% capacity. Processing plant operations and order volumes have rebounded amid the seasonal peak season, but the pace of finished product inventory reduction remains slow. High prices across the supply chain are not being effectively transmitted to the end-user, placing continued pressure on costs.

Regarding raw material inventories, large factories currently hold approximately one month's worth of raw materials, while small and medium-sized enterprises are still primarily focusing on restocking. Overall, stockpiling activity is weak, with a wait-and-see attitude prevailing.

Glove factory operations in North China have increased to approximately 60-70%. As the industry enters the traditional peak season of September, end-user orders have rebounded somewhat, but some factories still report lower than previous year-ago levels. Currently, raw material and finished product inventory levels at processing factories are generally low.

However, due to persistently high raw material prices and significant production cost pressures, factories are cautious about restocking, and future stocking plans remain uncertain. Furthermore, some factories are currently focusing their production capacity on nitrile gloves, with latex glove production lines largely idle.

5. Natural Rubber Price Difference Statistical Chart

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