Orientflex Invites you to our booth in AAPEX
Since June, the rubber sector has been rising strongly. As of the close of June 7, the prices of the three major rubber contracts have all hit new highs this year.
The US non-farm data in May far exceeded market expectations, which has a certain drag on commodities. After the Dragon Boat Festival, the price of natural rubber may fall back. However, the current global natural rubber supply is tight, and the rubber price is expected to be strong in the future.
The tight supply situation is difficult to change
In May, due to weather disturbances, rubber tapping in global rubber producing areas was hindered. The release of new rubber was less than expected. Therefore, the price of natural rubber rose sharply that month. In early June, the drought eased slightly, and the rainfall in the main producing areas increased significantly compared with the previous period. However, the increase in rainfall in southern Thailand affected the progress of new rubber tapping. Therefore, the situation of low production has not been broken. The price of raw materials has been on a continuous upward trend. As of June 7, the price of Thai glue was 82 baht/kg, and the price of cup rubber was 61.95 baht/kg. They reached their highs since mid-to-late April. Among them, the price of Thai glue has increased by nearly 90% compared with the same period last year. While the price of cup rubber has increased by 56.64% compared with the same period last year. Both are high in recent years.
From the perspective of the late production area, irregular rainfall disturbances are still present in some major production areas at home and abroad. The rubber tapping process is still not smooth, and the tight supply situation is difficult to change.
From the perspective of the external market, although the northeast of Thailand is normally tapped, the planting areas of Thai rubber are mainly concentrated in the south. According to weather forecasts, precipitation in southern and northeastern Thailand is still increasing in the short term. Therefore, the amount of glue released in the later period is limited. On the other hand, the Vietnamese production area has basically entered the stage of full tapping. However, it is in the initial stage of raw material output, and the output is limited. And the foreign raw materials from Cambodia, Laos and other countries are limited. It still cannot meet the normal production needs of the processing plant.
From the perspective of the domestic market, the weather conditions in the Hainan production area have improved. However, irregular precipitation still disturbs, limiting the normal progress of rubber tapping. The Yunnan production area is disturbed by continuous rainfall, and the current tapping in Xishuangbanna is about 70%. The precipitation is low in the later period, and the output may increase. But overall, the tight supply situation in production areas is difficult to change in the short term.
Because of such situation, the price of natural rubber will rise in the future months. While the rubber products like rubber hose and tire will also rise.
Related posts
