Rubber Supply Demand Analysis
1. Rubber Spot Market Analysis
This week, rubber spot prices showed a slight upward trend. Domestic production areas are gradually entering a period of reduced output, impacting peak season supply. Domestic raw material prices remained firm, while downstream purchasing intentions were relatively weak, mainly focusing on replenishing only essential needs. Overall market trading activity was moderate. It is expected that the natural rubber market will continue to fluctuate within a range in the short term, lacking significant drivers.
This week, natural latex spot market offers fluctuated narrowly. Traders' offering activity was moderate. Futures prices were slightly stronger, boosting market bullish sentiment. Raw material and cost prices in domestic and international production areas stabilized, providing cost support. Traders maintained firm prices, while downstream product manufacturers showed cautious buying interest, with transactions mainly based on immediate needs.
Market Forecast:
1. Rainfall will continue to disrupt the market, releasing raw materials gradually;
2. The operating rate of sample tire manufacturers is expected to improve next cycle;
3. Inventory levels in Qingdao, China, continue to accumulate;
4. Exchange rates, Fed rate cuts, etc.
2. Natural Rubber Supply Analysis
2.1 Thailand Production Area
During the period, increased rainfall in southern Thailand affected peak season supply, keeping latex prices high. Improved weather in the northeast accelerated supply release, supported by some overseas EUDR orders, resulting in firm cup lump purchase prices. Factory raw material inventories ranged from 30 days to 60-90 days, with overall inventory levels lower than the same period last year. Factories maintained normal production and long-term contract shipments. Local and international tire manufacturers in Thailand maintained neutral purchasing activity, with domestic shipments mainly consisting of mixed rubber and limited standard rubber.
2.2 Vietnam Production Area
This week, continued rainfall disrupted production in Vietnam. Flooding in the central and northern regions, coupled with persistent rain in the south, constrained the pace of raw material supply during the peak season. Factories actively purchased to ensure order fulfillment, pushing up raw material prices and increasing cost pressures on processing plants.
2.3 Yunnan Production Area
Raw material prices in Yunnan production area rose. Heavy rainfall over the weekend impacted raw material output, but weather gradually improved this week, reducing the impact on rubber tapping. Raw material production returned to normal, and local processing plants increased their willingness to buy, driving up raw material purchase prices.
2.4 Hainan Production Area
Weather improved in Hainan production area this week, and rubber tapping gradually resumed. Raw material production returned to normal, and fresh latex production on the island showed seasonal trends. To ensure their own production, local processing plants maintained a premium purchase price for raw materials, supporting firm raw material prices.
3. Natural Rubber Cost and Profit Analysis
3.1 Overseas Production Area: Thailand
The theoretical production profit of Thai STR20 fluctuated narrowly. Cup lump prices remained firm this period, and factory costs did not fluctuate significantly. Rubber prices trended upwards during the period, and the theoretical production profit loss of Thai STR20 narrowed slightly.
3.2 Domestic Production Area: Hainan
Recently, raw material output in Hainan has improved, increasing the supply of fresh latex in the market and helping local processing plants increase their operating rates. Raw material prices in Hainan remain high, putting continued pressure on processing plants' production costs. However, due to weak demand and other factors, the upward pressure on rubber prices is insufficient, leaving concentrated latex processing plants with limited profit margins and relying heavily on by-products such as latex clearing to realize profits.
4. Natural Rubber Demand Analysis
4.1 Downstream of Dry Rubber
The operating rate of semi-steel tires in China is 73%. The operating rate of all-steel tires in China is 64%.
During the period, the operating rate of semi-steel tires remained relatively stable, while the operating rate of all-steel tires declined. Most sample semi-steel tire plants operated stably during the period, with narrow fluctuations in operating rates. A few sample all-steel tire plants underwent maintenance during the period, dragging down the overall operating rate.
4.2 Downstream of Concentrated Latex Gloves
It is understood that Wenzhou foam factories are operating at an average capacity of around 40%, with some differences between large and small factories. Driven by promotional events such as Singles' Day, end-user orders have improved somewhat, but are still below the levels of the same period in previous years. Finished product sales are slow, and price increases are limited, resulting in poor profit performance for processing plants. Factories are cautious about replenishing raw materials and have limited willingness to stockpile. It is understood that some large factories are currently purchasing shipments to replenish their inventories, while small and medium-sized enterprises are still mainly replenishing for essential needs.
It is understood that glove factories in North China are maintaining an average operating rate of around 60-70%, with a relatively stable overall operating status. Processing plants are operating at a reasonable level. Domestic orders are stable with relatively small year-on-year fluctuations, but recent foreign trade orders have weakened significantly compared to last month. Orders for "Golden October" failed to be released as expected, mainly due to the uncertainty of the foreign trade environment. Currently, processing plants generally have low raw material and finished product inventory levels and are cautious about replenishing raw materials at current prices. In addition, some factories are currently focusing their production capacity on nitrile gloves, with limited operation of latex glove production lines.
5. Natural Rubber Price Spread Chart
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