I. Rising and falling lists
According to the price monitoring of Business Association (100ppi.com), there are 11 kinds of commodities in the rising and falling list of commodity prices in the 35th week of 2019 (9.2-9.6). The top three commodities are natural rubber (3.14%), EPS (2.54%) and cis-butadiene rubber (2.26%). There are two kinds of goods falling in the ring-to-ring ratio, PA66 (-1.44%) and LDPE (-0.31%) respectively. This week’s average rise and fall was 0.84%. Among them, the natural rubber ring rose by 3.14% and 5.97% year-on-year.
II. Commodity Index
On September 6, the natural rubber commodity index was 32.53, down 0.23 points from yesterday, down 67.47% from the peak of 100.00 points in the cycle (2011-09-01), and up 15.56% from the low of 28.15 points on November 25, 2015. (Note: Period refers to 2011-09-01 to date)
3. Market Trend
In the first half of 2019, the market of natural rubber was ups and downs, while in the second half, it was still quite distressing. The first quarter experienced a sharp increase of nearly 10% in February, and fell back to the starting line in March. The second quarter rebounded 4% in April and then started the decline mode until the last trading day when the Customs announced the policy of “mixing rubber classification” began to rise. In May, the price of rubber continued to rise. The impact of classification and inspection of mixed rubber, high temperature and drought and insect pests was tremendous. Especially, the shortage of new rubber supply caused worries about future supply. The price of Tianguo had risen by 10%, followed by a drop in sentiment and a three-point decline in the price shock of rubber. June continued to be a weak shock, a monthly decline of 5.7%, known as “business is very difficult to do”. In the first half of July, Tianjiao shocks dropped until the 16th RU1909 contract closed at 10460 points, down 150 points on the same day, the lowest point of the month, with a decline of 8.15% on the 1st to 16th days. After that, Tianjiao shocks rebounded in the second half of the month and then decreased slightly, with the main contract closing at 10670 points on the last trading day of the month. On August 12th, Tianjiao 20 rubber was listed on the market in the last period of energy. Full latex futures continued to be weak. The highest price was 10,624 yuan/ton on the 31st day, the lowest was 10,260 yuan/ton on the 2nd day, and the maximum monthly amplitude was 3.55%. From the morphological point of view, the first half of August showed an incomplete trend of “W” and the second half showed a trend of “V”, which was generally small in the current month. Amplitude shocks, weak market. Enter September, this Sunday glue market all the way up, Shanghai glue (whole emulsion) on Friday slightly callback, spot glue prices on the day of the decline is not much; 20 glue this week, the highest price 10450, the largest increase of about 3.91%, but after Friday callback, weekly closing at 10190, the increase basically fell back to the beginning of the week; According to business community (100ppi.com) monitoring data, 17, The mainstream quotation for SCRWF in East China was 10 634 yuan per ton on Monday (2 days) and 10 968 yuan per ton on Friday (6 days). The weekly increase was 3.14%.
IV. Factor Analysis
Rubber-producing factors: In August, the main natural rubber producing areas encountered bad weather, the weather returned to normal in the second half of the month, rubber tapping went smoothly in the peak season, and the output increased significantly. Recent data from the Association of Natural Rubber Producers (ANRPC) show that the global production of natural rubber in the first five months of 2019 was 4.93 million tons, down 6.5% year on year. At the same time, the world natural rubber consumption increased by 0.9% to 5.8 million tons, the gap between the two is less than 860,000 tons. The analysis shows that the reason is that the price of Tianguo has dropped from 40,000 to less than 10,000 tons. The sharp reduction of Tianguo income and the increase of costs such as tapping labor will lead to a sharp decrease in the enthusiasm of rubber farmers, and the output will be affected naturally.
Import and Export: China imports 553,000 tons of natural and synthetic rubber (including latex) in July 2019, up 25.4% annually, down 3.15% from the same period last year, and 3629,000 tons in January-July, down 7.1% from 3994,000 tons in the same period last year. Vietnam: According to the Vietnam News Agency, data from the Import and Export Bureau of the Ministry of Industry and Trade of Vietnam show that rubber exports and exports increased by 8.2% and 4.5% from January to July 2019, respectively, by 764,000 tons and 1.05 billion US dollars. In July, Vietnam’s rubber export volume and export volume reached 150,000 tons and 211 million US dollars respectively, which increased by 22.2% and 20.9% annually, respectively, and increased by 5.7% and 12.5% year-on-year respectively. The price of latex materials in Vietnam is also declining due to the fear that demand will decrease and the price of rubber market in the world will continue to decline. The decline in rubber prices is due to the prolongation of the Sino-US trade war and the slowdown of global economic growth, resulting in a decline in rubber demand. According to other statistics, Vietnam exported 116,000 tons to China in July, up 63.31% annually and 21.99% year-on-year. From January to July, exports to China reached 501,100 tons, an increase of 9.69% over the same period last year. Thailand: Data show that in June 2019, Thailand’s exports of natural rubber (including composite rubber) increased by 3.2% year-on-year and 11% year-on-year. Indonesia: Natural rubber exports in June 2019 were 225,000 tons, down 14.96% annually and up 1.4% year-on-year. Among them, standard rubber exports were 191,000 tons, mixed rubber 0.26 million tons and cigarette film 0.84 million tons. From January to June, the total export volume of natural rubber in Indonesia was 1.2974 million tons, down 13.11% from the same period last year. Malaysia: According to statistics released by the Bureau of Statistics, Malaysia’s natural rubber production in June was 36957 tons, down 107.5 million tons from 41,364 tons in the same period last year. The analysis shows that from September, Thailand, Indonesia, Malaysia and other countries jointly restrict the export of Tianguo expired, and the domestic import of Tianguo may increase.
Demand aspect: In August, tyre enterprises were limited by high temperature power limitation and typhoon storm, but after the typhoon, the start-up rate rebounded. As of August 30, 2019, the start-up load of all-steel tyres in Shandong tyre enterprises was 69.61%, 7.95 percentage points higher than the previous period, 10.53 percentage points higher than the same period last year. The start-up load of semi-steel tyres in domestic tire enterprises is 70.23%, which is 11.07 percentage points higher than the previous period and 17.27 percentage points higher than the same period last year. However, the peak season of all steel dealers is not strong and the stock is high. In the early days of National Day, strict environmental protection inspection will affect the start-up rate of enterprises. Statistics show that China’s tire production continued to decline in the first half of 2019, with a total tire output of 403,745,000 in January-June, down 1% from the same period last year; in July, China’s heavy truck sales of 76,000 vehicles, a 27% decline in the ring, a 2% increase over the same period last year; in January-July, the total sales of 732,300 vehicles, a 2% decrease over the same period last year. In July, China’s automobile production and sales declined by 5% and 12.1% respectively, 11.9% and 4.3% respectively, compared with the same period last year. From January to July, automobile production and sales completed 13.933 million vehicles and 14.132 million vehicles respectively, down 13.5% and 11.4% from the same period last year. In terms of export situation, the Sino-US trade war situation is still grim and export is affected.
Inventory: Domestic Tianguo inventory is still high, as of September 6, 2019, the last period of natural rubber inventory 46,6829 tons, warehouse receipts 42,2190 tons.
1. Relaxation of automobile consumption: In mid-August, the State Council issued “Opinions on Speeding up the Development of Circulation and Promoting Commercial Consumption”, proposing 20 policy measures such as gradually relaxing or abolishing automobile purchase restrictions and supporting green intelligent commodities to replace old ones with new ones; in June, the State Development and Reform Commission and other three departments issued documents to prohibit the introduction of new automobiles everywhere. Vehicle purchase restrictions. Experts believe that the trend of “relaxation” can be seen from the document, together with the issue of “20 consumption items”, to promote China’s automobile consumption has become an overall tone, and the prospects for automobile production and marketing are optimistic.
2. Renminbi depreciation leads to cost increase: At present, the formula for calculating the import cost of natural latex is as follows: (US dollar shipping price * exchange rate + tariff)* (1 + 13%) + customs declaration and other miscellaneous charges, value-added tax 13%. Renminbi depreciation increases the import cost, the exchange rate depreciates from 6.9 to 7.2, and the import cost is about 400 yuan/ton. The superimposed cost of natural quotation increased and the price increased.
The statistical data of March and August declined: PMI of manufacturing industry declined in August, production, order, inventory and price index were weak, and there was downward pressure on economic operation. The renewed escalation of Sino-US trade frictions has impacted the development expectations of manufacturing industry. At the same time, the high temperature and rainy weather have a certain impact on the prosperity of manufacturing industry, the most important of which is the insufficient domestic demand. Facing the pressure of weakening demand, the analysis holds that on the one hand, we should expand effective domestic demand and further strengthen the stability of infrastructure construction; on the other hand, we should promote tax reduction and fee reduction, focus on reducing the operating costs of manufacturing enterprises, promote the expected improvement of production and investment of enterprises, and boost the confidence of manufacturing industry.
4. The central bank lowered its benchmark to promote liquidity: On the afternoon of September 6, the central bank announced a 0.5 percentage point cut in the deposit reserve ratio of financial institutions in an all-round way on September 16. The release of funds could reach about 900 billion yuan. The commodity sector, especially commodities dominated by industrial attributes, may be vulnerable to such measures as benchmarking.
Relevant products: According to the data of business associations, the commodity index of cis-butadiene rubber on September 6 was 34.02, which was the same as that of yesterday. The commodity index of cis-butadiene rubber on September 6 was 66.78% lower than the highest point of 102.40 points (2011-09-25), 43.30% higher than the lowest point of 23.74 on February 04, 2015, and 34.52 on September 6, which was the same as that of yesterday. The highest point 103.60 points (2011-09-08) decreased by 66.68%, up 21.51% from the lowest point 28.41 on January 19, 2016. (Note: Period refers to 2011-09-01 to date)
V. Future Market Forecast
Natural rubber analysts at the business association believe that by September, the number of multifaceted factors had increased. Among them, under the combined effects of macroeconomic environment, statistical data indicators, commodity circulation costs, downstream start-up rate and purchasing demand, the attention of natural rubber has recently risen and prices have risen. Although its production and inventory are still at a high level, and do not exclude speculative factors, we believe that under the recent impact of comprehensive factors of natural rubber, prices may still oscillate at a high level. At present, we should consider the seasonal consumption characteristics of autumn, and the “golden nine silver ten” consumption peak season deserves attention.