Rubber Regions: Price & Supply Update

1. Foreign production areas

1. Thailand production area

Thailand's raw material prices have fallen slightly, and the price difference between cup and water continues to narrow month-on-month. At present, there are still rainfall disturbances in some parts of Thailand, the overall raw material supply is stable and increasing, the second-hand dealers have successively sold their inventory, and the factories have no intention to increase the price to purchase, and the raw material prices have fallen. Thailand's STR20 theoretical production profit has improved month-on-month.

During the cycle, the price of cup rubber has fallen, the cost pressure of the factory has weakened, the futures market rose in the second half of the week, the factory quotations followed the rise, and the shipment enthusiasm was good. The raw material inventory of Thai factories ranges from 30 days to 60-90 days.

The inventory levels of various factories are different, and the finished product inventory is not much. Normal production and long-term delivery are maintained. Some factories are actively selling EUDR rubber.

2. Vietnam production area:

Recently, there are still rainfall disturbances in some parts of Vietnam's production area, but the overall supply shows a stable incremental pattern. The trend of its raw material prices has diverged. Due to poor orders and profits, the purchase price of glue has weakened, but the center of gravity of cup rubber prices has risen slightly, mainly because the raw material inventory of No. 10 rubber processing plants is still at a low level, and there is a rigid demand for replenishment.

At present, due to the lack of new orders for 3L rubber and relatively poor profits, some rubber processing plants prefer to produce latex, and glue resources are preferentially diverted to latex production lines. 3L rubber production is mainly based on the delivery of existing orders. In addition, overseas demand has been average recently, and Vietnamese rubber processing plants are more active in shipping to the Chinese market.

2. Domestic production areas

1. Yunnan production area

The weather in Yunnan production areas has improved in some areas, and the output of glue has increased month-on-month, but the acquisition of raw materials by concentrated milk plants remains strong, and the acquisition resistance of standard rubber plants still exists. The price of raw materials remains strong, and most of the operations are maintained at full capacity.

Due to the strong acquisition of concentrated milk plants, the acquisition resistance of standard rubber plants is relatively large. In order to maintain normal production, they mainly purchase foreign raw materials to produce tire rubber, and the operation of pure standard rubber is only about 20-30%.

With the improvement of weather in the future, the release of raw materials may accelerate, but the momentum of concentrated milk diversion remains unabated, and it is expected that the downward space of raw material prices will be limited in the short term.

2. Hainan production area
The weather conditions in Hainan production area have improved, rubber tapping operations have been gradually promoted, and the output of raw materials on the island has resumed seasonal growth. It is heard that the daily rubber harvesting volume of the whole island is about 4,000 tons, but it is lower than the same period of previous years.

In order to ensure their own production and order delivery, local processing plants continue to increase the price of raw materials. In terms of the start-up of processing plants, the start-up of local processing plants has improved compared with the previous period, but the overall supply growth rate in Hainan production area this year is lower than expected, and the local rubber processing capacity has a certain surplus, which supports the price of raw materials and keeps its price center of gravity in a relatively high range.

In the next week, there will still be thunderstorms in Hainan production area, and the rhythm of raw material release is expected to be slow. However, there is production demand in concentrated milk processing plants, and it is expected that the center of gravity of its glue price may remain high.

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