Rubber Daily Report: Bearish Sentiment Intensifies
Index
On July 20th, the Qingdao STR20 price index for natural rubber was $2220/ton, up $20/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Weather conditions in parts of Thailand improved compared to the previous day, leading to an increase in new rubber production. Futures prices rose, Thai factories actively shipped rubber, increasing demand for raw material replenishment. Rubber farmers and secondary traders were reluctant to sell, pushing up raw material procurement prices. In Vietnam, raw material production is progressing normally, with overall latex production slightly increasing compared to the previous day. However, frequent afternoon thunderstorms and El Niño-driven daytime high temperatures resulted in slight divergence in raw material production.
Domestic: Rainfall persisted in Yunnan, but the impact on rubber tapping was limited, and raw material purchase prices stabilized. Weather conditions improved in Hainan, with rubber tapping gradually resuming, and raw material production gradually recovering to seasonal levels.
On the demand side: It is understood that companies that underwent maintenance earlier are gradually resuming operations, and production facilities are entering a phase of gradual restart, with the industry's operating rate showing a recovery trend.
However, at the same time, some manufacturers are still maintaining controlled production due to factors such as market demand and cost pressures. Coupled with the fact that the load of resumed facilities is still in the process of increasing, the overall increase in operating rate is relatively limited.
Futures and Spot Prices Overview
Market Outlook
Today, the futures market maintained a slightly bullish and volatile pattern, with spot prices rising slightly in line with the futures market. On the supply side, the expected seasonal increase in supply will continue to suppress raw material procurement prices, and raw material prices may decline.
However, the El Niño climate expectation is still developing, providing strong support for rubber prices. Downstream purchasing intentions are relatively weak, with most purchases focused on moderate replenishment to meet immediate needs. Coupled with increased volatility in commodity market sentiment, the downside risk for rubber prices is relatively high.
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