According to the commodity market analysis system of SunSirs, the natural rubber spot market has fluctuated and risen in 2023. On January 1, 2023, the spot price of natural rubber was 12,250 RMB/ton, and on December 31, it was 13,060 RMB/ton, with an annual increase of 6.61%; The low point of the year was 11,210 RMB/ton on April 7th, and the high point was 13,320 RMB/ton on October 19th, with an amplitude of 18.82%.
After a rapid decline in natural rubber in the first quarter, it continued to experience weak fluctuations. Affected by the low supply period, public health events, and the Spring Festival holiday in January, the mainstream natural rubber market in China fluctuated slightly upwards, and turned downwards at the end of the month. In February, there was a significant reduction in demand from Europe and America, with fewer new downstream procurement orders and weak market transactions. The market rebounded after the Spring Festival and saw a rapid decline, fluctuating back and forth around the level of 12,000 RMB/ton. In March, the arrival volume of Tianjiao to Hong Kong continued to increase, and downstream demand remained weak. Shanghai Jiao continued to fluctuate and decline, with a slight rebound at the end of the month.
In the second quarter, multiple factors led to a short-term upward trend in the natural rubber market, and after the heat faded, the market eventually fell. In April, Yunnan's powdery mildew and drought caused a significant increase in the daily market, but imported rubber gradually arrived at the port, and spot rubber continued to accumulate inventory. The operating rate decreased to 50-60% month on month, and the weak downstream demand led to a sustained trend of strong supply and weak demand. After experiencing the "red headed document" market trend in May, the country's collection and storage, "Thailand's bullish trend", and the market had a certain impact, ultimately leading to weak support, weak upward momentum, and a decline in the market, which returned to calm. The concentrated rubber market is poor, with full latex as the focus. Tianjiao continues to arrive at the port and the accumulation speed slows down, but the accumulation status has not changed; The operating rate of downstream factories increased month on month, and the heat of the car price war gradually subsided, leading consumers to resume rational consumption. In June, the domestic natural rubber futures market was initially up and then down, with both positive and negative factors in the market. The supply side pressure continued to increase and the demand side continued to be weak. However, the policy for new energy vehicles continued and tire exports increased year-on-year. It is expected that there will be insufficient natural upward momentum in the future, and there is a possibility of short-term speculation and upward momentum.
Affected by limited raw material output in the third quarter, the natural rubber market fluctuated and rose. Rumors of hoarding in the domestic market have resurfaced, stimulating the domestic adhesive market; In addition, the impact of domestic and foreign rainy weather on the production of new rubber is significant, limiting the production of raw materials and hindering the output. The export situation of tire enterprises is good this quarter, and factories are operating at a high level. During the peak consumption season of "Golden Nine Silver Ten", the natural rubber market has certain positive demand support.
The news of rotational storage in mid November of the fourth quarter has resurfaced, stimulating bullish sentiment in the market and driving up rubber prices. As the end of the year approaches, domestic latex production is gradually stopping, and the expected positive effect of reduced production is gradually becoming apparent. In addition, driven by pre year stocking, the price of domestic latex is relatively strong. In December, Thailand was in the peak season for rubber cutting, but some areas experienced floods and limited raw material output, supporting the natural rubber market.
Forecast of natural rubber market in 2024
Supply side: China's natural rubber imports may continue to increase in 2024, and imported rubber will continue to be destocked
In terms of new rubber production, influenced by seasonal factors, climate issues have once again become a global focus in 2023. The drought in Yunnan in April and floods in Thailand at the end of the year have hindered rubber cutting. Every year, the main production area undergoes a process of reducing production, stopping cutting, opening cutting, and increasing production. Domestic natural rubber production is concentrated in Yunnan and Hainan provinces. In recent years, the proportion of production in Yunnan's production areas has gradually increased to about 60% of the national proportion. Among them, Xishuangbanna is its largest sub production area, and Pu'er and Lincang also contribute some of the production.
The latest report released by ANRPC predicts that global natural rubber production will increase by 6.5% year-on-year to 15.141 million tons in 2023. Among them, Thailand increased by 2.5%, Indonesia increased by 17.4%, China decreased by 3.1%, India increased by 3.8%, Vietnam increased by 4.1%, Malaysia decreased by 9.8%, Cote d'Ivoire increased by 16.5%, and other countries increased by 5%. The global consumption of natural rubber in 2023 is expected to decrease by 0.5% year-on-year to 15.51 million tons. Among them, China increased by 3.8%, India increased by 5.7%, Thailand increased by 16.2%, Indonesia increased by 3%, Malaysia decreased by 22.3%, Vietnam increased by 0.2%, the European Union decreased by 6.4%, the United States decreased by 9.9%, Japan decreased by 1.5%, and other countries decreased by 18.2%. The growth of natural rubber production in traditional rubber planting countries is weak, and the main source of imports in China is still Thailand.
According to data, Thailand's total exports of natural rubber (excluding composite rubber) in 2023 were 2.724 million tons, a year-on-year decrease of 17%; The total export of natural rubber to China was 1.066 million tons, a year-on-year increase of 0.1%. Vietnam exported a total of 761,000 tons of natural rubber, a year-on-year decrease of 7% from 818,000 tons last year; Exports to China totaled 246,000 tons, an increase of 9% year-on-year from 225,000 tons last year. Cambodia's rubber exports reached 368,048 tons, a decrease of 1.3% from 372,903 tons in the same period of 2022. The total export volume of Ivory Coast natural rubber is 1.63 million tons, an increase of 19.2% from 1.37 million tons in the same period of 2022.
In terms of imports, as shown in the figure below, China imported a total of 7.952 million tons of natural and synthetic rubber (including latex) in 2023, an increase of 8% from 7.36 million tons in 2022. It is expected that the growth rate of global natural rubber production will further slow down in 2024, and the annual production growth rate of ANRPC is expected to be 2.20%; The import volume of natural rubber in China is expected to continue to increase in 2024.
Statistics on the quantity of natural rubber and synthetic rubber (including latex) imported from China from January to December 2023
In terms of inventory in Qingdao, data shows that as of December 31, 2023, the social inventory of natural rubber in China was 1.559 million tons, an increase of 10,600 tons or 0.69% compared to the previous period; The total inventory of Tianjiao bonded and general trade in Qingdao area is 663,700 tons, a decrease of 900 tons compared to the previous period and a decrease of 0.13% compared to the previous period; The inventory in the bonded zone increased by 1.26% month on month to 114,100 tons, while the general trade inventory decreased by 0.42% month on month to 549,500 tons. The Qingdao area increased from 581,600 tons at the beginning of the year to 905,200 tons, and then dropped to 663,700 tons at the end of the year.
Demand side: Domestic tire production capacity continues to expand in 2024, and natural rubber demand is expected to increase slightly
In 2024, domestic tire production capacity will continue to expand. It is reported that in 2024, the production capacity of semi steel tires and full steel tires will increase by 25 million and 5.5 million, respectively, with a year-on-year increase of 3% and 2.5%. In addition, the expected increase in both internal and external demand for tires in 2024 will support the domestic tire industry to maintain a high operating rate, thereby forming support for the natural rubber market in 2024.
The driving force for tire demand in 2024 is divided into two paths: internal and external. On the one hand, the expected increase in domestic automobile production and sales provides support for tire demand. Affected by the expansion of domestic demand and industrial policy support, the demand for tires will continue to grow domestically. It is reported that at the 2024 China Automotive Market Development Forecast Summit held on December 11, 2023, the China Association of Automobile Manufacturers (CAAM) predicted that the sales of automobiles and new energy vehicles in 2024 would be approximately 31 million and 11.5 million respectively, with a year-on-year increase of 3% and 20%. On the other hand, the improvement of domestic tire technology and low prices have continuously enhanced the competitiveness of Chinese tires in the international market. In addition, the development of emerging markets such as Mexico and Brazil has created opportunities for Chinese tire exports. It is expected that the domestic tire export volume will continue to increase compared to the same period in 2024.
In the first half of 2023, natural rubber has not emerged from the market pressure caused by supply pressure, which is significantly different from the normal traditional trend in previous years; The trend in the second half of the year is more in line with previous years. Looking ahead to 2024, China's dependence on natural rubber imports will be over 90%, with a high level of dependence on imports. In terms of supply, climate issues will still be a global focus in 2024, and the pace of natural rubber production will be constrained by climate change; It is expected that the growth rate of global natural rubber production will further slow down in 2024, and the annual production growth rate of ANRPC is expected to be 2.20%; The import volume of natural rubber in China is expected to continue to increase in 2024. In terms of demand, domestic tire production capacity will continue to expand in 2024, and natural rubber demand is expected to increase slightly. In addition, the expected increase in both internal and external demand for tires in 2024 will support the domestic tire industry to maintain a high operating rate, thereby forming support for the natural rubber market in 2024. It is expected that the natural rubber market will continue to fluctuate with the seasonal characteristics of consumer demand in 2024, with the highest point occurring in the second half of the year and expected to be around 14,000 RMB/ton; The low point of the 2024 market is expected to occur in the first half of the year, around 11,000 RMB/ton.
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