Commodity index: According to the monitoring of the business community, the natural rubber commodity index on October 31 was 33.12, down 0.92 points from yesterday, down 66.88% from the highest point of 100.00 (2011-09-01) in the cycle, and up 21.41% from the lowest point of 27.28 on April 2, 2020. (Note: Period refers to 2011-09-01 to now)
Figure 2: Trend of mainstream prices of natural rubber in October 2022
Commodity market: According to the monitoring of the business agency, the main spot market of natural rubber (Baodao full milk) in East China was about 12310 yuan/ton on October 1, and about 11170 yuan/ton on October 31, with a monthly drop of 9.26%. This price is not only the lowest since the same period in October 2021, but also the lowest since the same period in 2020. The market is very poor.
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Figure 3: Weekly K Histogram of Natural Rubber Market in 2022
Industry: The monitoring of the business community shows that the current market atmosphere is empty, and the situation of oversupply is prominent. Supply: The global supply is stable, the current rubber production is still in the peak season, and the spot inventory continues to be high. Demand: The foreign demand continues to be sluggish, the tire enterprises’ orders are limited, the operating rate is low, the tire inventory is high, the supply pressure is high, and the demand for natural rubber procurement continues to be weak. Import: Statistics show that the export volume of natural rubber from Thailand, the main producer, in the first three quarters of the year increased by about 1% to 870000 tons. The export volume of Vietnam in the first three quarters is expected to increase by about 50% year on year. As the largest consumer of natural rubber, China’s import volume from the two countries in the first three quarters of the year is expected to increase by about 14% compared with last year. Exports: customs data show that China’s tire exports fell in September on a month on month basis, and the year-on-year growth rate of export value also fell significantly. Inventory: By the end of last week, the number of arrivals had increased, and domestic port inventory and social inventory had rebounded slightly. In terms of replacement rubber, the price of mixed rubber has continued to decline recently, and the price difference between all latex and mixed rubber has continued to widen.
Recent hot spots:
1. The China Association of Automobile Manufacturers disclosed that from January to September 2022, the industrial added value of China’s automobile manufacturing industry increased by 6.9% year on year, 2.4 percentage points higher than that from January to August, and 3.7 percentage points higher than that of the manufacturing industry in the same period.
2. On October 25, the European Tyre and Rubber Manufacturers Association (ETRMA) released market data showing that in the third quarter of 2022, the sales volume of replacement tyres in Europe fell by 9% year-on-year to 63.53 million.
3. According to the latest data released by the National Bureau of Statistics, in September 2022, China’s output of rubber tire casings was 754.54 million, an increase of 9.2% year on year. From January to September, the output of rubber tire casing decreased by 4.1% over the same period of last year to 63931.7 million.
4. On October 24, the General Administration of Customs released tire export data for September 2022 and the first three quarters. Among them, in September, China’s rubber tire exports totaled 600000 tons, a year-on-year decrease of 70000 tons, or 1.8%; The export amount was RMB 10.601 billion, up 9.1% year on year, down 5.8 percentage points.
5. According to the data of the European Automobile Manufacturers Association (ACEA), the sales volume of passenger cars in the European Union increased by 9.6% to 787870 in September, two consecutive months and 4.4% in August. However, this growth is mainly due to the low comparison base in September 2021, when the shortage of semiconductors hindered automobile production; In the first three quarters of 2022, the European passenger car market shrank by 9.9% to 6.78 million vehicles.
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6. In September 2022, China’s heavy truck market will sell about 52000 vehicles (invoicing caliber), up 13% month on month and 12% lower than 59200 vehicles in the same period last year. 52,000 units are the lowest sales volume in September since 2016, and September this year is also the 17th consecutive month of decline in the heavy truck market since May last year. Downstream demand is sluggish and inventory is high, and heavy truck sales are less than expected..
Figure 4: Comparison Chart of Annual Spot Market Trend of Natural Rubber from 2020 to 2022
As can be seen from the above figure, the natural rubber market continued to fall in October 2022, much worse than that in the same period of 2020 and 2021.
Future forecast: China’s tire export was under pressure in the third quarter, and continued to fall back in September. At present, the market pessimism is spreading. Many exporters report poor sales in foreign markets, economic recession expectations, weak overseas demand, and the impact of multiple public health events on the industry continues to be negative. The supply is strong, the downstream demand of natural rubber continues to be weak, the market is pessimistic, and the export situation is poor. Excluding the factors of technical rebound, it is expected that the weakness of natural rubber in the future market will continue in the short term.
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