According to the monitoring of business society, in April, the domestic natural rubber (standard 1) in China’s East China market was generally weak and volatile, and rebounded slightly at the end of the month: the mainstream of the domestic market reported about 13110 yuan / ton on the 1st, and the main report of 12512 yuan / ton on the 29th, with a monthly decrease of 4.56% and a year-on-year decrease of 6.68% at the end of the month. Among them, the highest price of this month is 13150 yuan / ton on the 1st, and the lowest price is 12260 yuan / ton on the 25th, with a maximum amplitude of 6.77%.
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Figure 4: K-bar chart of natural rubber market week in April 2022
Industry analysis: macroscopically, domestic public health events have a wide impact, affecting the supply of raw materials, circulation and sales of finished products; Internationally, the global economic growth rate is expected to be lowered. Supply side: the recent light rain in Thailand has little impact on rubber cutting, but the output of new rubber is low, and the output in the northeast is gradually released. According to Reuters data, the rainfall in the country is expected to increase month on month in the next two weeks, of which the rainfall in the South will reach about 10mm per day, or affect the output of glue; Vietnam’s main production area has good weather and smooth rubber cutting, but the output is less than half; China’s domestic area: Yunnan has been fully cut, and the output is normal. The delayed cutting in Hainan is slightly higher than expected. We need to pay attention to the subsequent material conditions, especially powdery mildew. The market is expected to increase significantly in the middle of May. Demand side: with the arrival of the off-season of consumption in the middle of the year, coupled with the continuous impact of public health events, it is difficult for rubber in Shanghai and other places to leave the warehouse, the circulation of raw materials and finished products in many places in China is blocked, the export demand decreases and it is difficult to recover in the short term; Heavy truck distribution and sales data show that all three major demands have weakened significantly; The slowdown of internal and external demand leads to heavy finished product inventory of tire enterprises, great pressure to go to the warehouse, and the commencement of enterprises is affected. Moreover, the May Day holiday is approaching, and the commencement rate is expected to decline. Inventory: the data show that as of April 25, 2021, the inventory of natural rubber in Qingdao free trade zone was 79300 tons, a decrease of 35000 tons compared with last week and a decrease of 4.27% month on month; The natural rubber inventory outside the bonded area was 297100 tons, a decrease of 9700 tons compared with last week, a decrease of 3.17% month on month. Among them, the destocking speed of dark glue is slightly faster. The market is expected to continue to slow down in the second quarter due to the slowdown in demand. Import and export: the data show that in March 2022, China imported 668000 tons of natural and synthetic rubber (including latex), down 6% from 711000 tons in the same period in 2021. From January to March 2022, China imported 1.861 million tons of natural and synthetic rubber (including latex), an increase of 3.9% over 1.791 million tons in the same period in 2021.
Figure 3: trend chart of mainstream international crude oil prices in April 2022
Macro analysis: on the macro level, since the outbreak of the conflict between Russia and Ukraine, the oil price has continued to fluctuate at a high level under the expectation of tight supply. April was basically the logic of shock rise. According to the monitoring of business society, WTI crude oil rose by more than 5% in April as of April 28. According to the analysis of business society, there are many factors interfering with the oil market in the short term. Recently (May 5), there is a resolution from the interest rate meeting of the Federal Reserve. In addition, it also depends on the monthly meeting of OPEC. At the same time, we need to pay attention to the trend of China’s public health events. In the short term, the negative interest rate will be disturbed, and the probability will be generally controlled by the end of the second quarter, which will support oil prices in the future. Thirdly, the most critical thing is the expectation that Russian oil will fall sharply under sanctions in the future, which will be the main driving force for the rise of oil prices.
Recent industrial hot spots: 1. The Thai Academy of industry revealed that the production capacity of export-oriented vehicles in March 2022 was 93840, a year-on-year decrease of 10.21%, which reduced the production capacity of export-oriented vehicles by 5.81% in the first quarter of this year, about 243124. Surapong, vice chairman of the Thai Institute of industry and head of the automotive industry group, added that the insufficient supply of semiconductor components for some passenger cars had reduced the shipment volume in major passenger car export markets including Asia, Australia and Europe, and stressed the need to pay close attention to the progress of the situation and the impact of the rise in raw material prices.
2. In the first quarter of 2022, Thailand exported 928000 tons of natural rubber (excluding composite rubber), an increase of 7% year-on-year. Among them, the total export of standard glue was 454000 tons, a year-on-year increase of 18%; The export of cigarette glue was 141000 tons, a year-on-year increase of 13%; Latex exports were 313000 tons, down 11% year-on-year. In the first quarter, the total export of natural rubber and mixed rubber was 1.268 million tons, a year-on-year increase of 6%; The total export to China was 650000 tons, a year-on-year increase of 4%.
3. According to the latest data released by the National Bureau of statistics, the output of rubber tire covers in China in March 2022 was 81.263 million, a year-on-year decrease of 1.5%. From January to March, the output of rubber tire casing decreased by 3.7% over the same period of last year to 206.323 million. In March, China’s synthetic rubber output was 676000 tons, a year-on-year decrease of 6.4%. China’s cumulative output of synthetic rubber from January to march was 1.831 million tons, a year-on-year decrease of 5.7%.
4. LMC automotive reported that in March 2022, global light vehicle sales fell by 14% year-on-year to 7.2 million vehicles. The US market continues to face tight inventory and high vehicle transaction prices. The sales volume in the Chinese market remains strong to a certain extent, and the global supply chain problem still limits the sales performance.
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5. The national passenger car market will be affected by the downturn in consumption in 2022, the Federation of passenger cars issued a document on the 19th. In the first quarter, the national passenger car market retailed 4.915 million vehicles, a year-on-year decrease of 4.5%, and the overall trend was lower than expected. Among them, the sales volume of traditional fuel vehicles was 3.85 million, a year-on-year decrease of 18%, and the domestic retail sales of new energy vehicles was 1.07 million, a year-on-year increase of 146.6%. About the second quarter: the loss caused by the temporary standstill of the automobile industry chain caused by public health events is huge, and the impact of the supply interruption of secondary parts will seriously affect the sales volume in the second quarter.
6. European Automobile Manufacturers Association (ACEA) data show that in March, EU passenger car sales fell 20.5% year-on-year to 844187. The conflict between Russia and Ukraine further exacerbated the continuous supply chain interruption and had a negative impact on automobile production. All four major markets of the EU decreased: Italy (- 24.4%), France (- 17.3%), Spain (- 11.6%) and Germany (- 4.6%).
7. ANRPC released a report in March, which predicted that in 2022, the global output of natural rubber is expected to increase by 2.3% year-on-year to 14.292 million tons. In March, the global output of natural rubber is expected to increase by 4.9% to 954000 tons. In the first quarter, the global output of natural rubber is expected to decrease by 1.1% to 3.186 million tons; In 2022, the global consumption of natural rubber is expected to increase by 2.2% year-on-year to 14.643 million tons. In March, the global consumption of natural rubber is expected to increase slightly by 0.1% to 1.288 million tons. In the first quarter, the global consumption of natural rubber is expected to decrease by 0.8% to 3.549 million tons.
8. According to the data released by the General Administration of Customs on April 13, China imported 668000 tons of natural and synthetic rubber (including latex) in March 2022, down 6% from 711000 tons in the same period in 2021. From January to March 2022, China imported 1.861 million tons of natural and synthetic rubber (including latex), an increase of 3.9% over 1.791 million tons in the same period in 2021.
Future forecast: the expectation of reduced economic growth is superimposed on the continuous impact of public health events, the demand slows down, the circulation system in many places is blocked, the delivery and delivery are difficult, the pressure on spot finished products continues to increase, and the start-up of enterprises is obviously suppressed. Although it is still in the low production period of new rubber, the output is also in a slow rising period, and the downstream demand is limited and the inventory is high. It is expected that the natural rubber market will continue to be weak and volatile in the future.
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