Beware of rapid rebound after the most popular Sha

2022-09-22
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Beware of a rapid rebound after the sharp fall of Shanghai Rubber Industry

affected by the intensifying U.S. financial crisis, the automotive industry has continued to report layoffs and production stoppages. People's negative outlook for the automotive industry has directly led to people's concerns about rubber demand, which has also triggered the sharp decline of Tianjiao. The decline of Japanese rubber in the domestic market closure also makes the prospects of Shanghai Rubber Industry worrying. Therefore, in this round of commodity market crash, The domestic Tianjiao market "topped" the list of falling limits. Since the resumption of trading during the National Day holiday, Shanghai Jiao almost closed at the falling limit. In the past two weeks, Shanghai Jiao has had seven falling limits, with a decline of nearly 30%, but this rate is still not as fast as that of Japan Jiao

this round of sharp decline disrupted the normal production and trading of all links of the rubber industry chain. Some small factories have begun to default and refused to accept high priced shipments in the early stage. In order to cope with the situation in the Chinese market and the decline in rubber prices, the international rubber alliance established by the main rubber producing countries Thailand, Indonesia and Malaysia jointly discussed the current problem of natural rubber this week. The main rubber producing countries are a series of measures to raise rubber prices in sliding friction countries, It may cause a rapid rebound after the sharp fall of Tianjiao

first, the main rubber precision screw pair transmission; 2. The reduction of production in the ordinary belt drive area corresponds to the sharp drop in rubber prices

1. Indonesia announced a 30% reduction in production

this week, in response to the declining price of natural rubber, the Indonesian Minister of Agriculture announced that the Indonesian government plans to cut rubber production and exports by 30% this year to raise the rapidly declining rubber price. Suharto honggokusumo, President of the Indonesian Rubber Association, said, "the Ministry of agriculture has asked farmers to adjust the frequency of rubber cutting from the usual once every two days to once every three days in order to reduce the supply of raw materials entering the market."

Indonesia is the second largest rubber producer in the world. In 2007, the output of natural rubber was 2.755 million tons, and the export volume was 2.406 million tons, accounting for about 25% of the global supply. Indonesia is expected to produce 2.9 million tons of natural rubber this year. If the production is reduced by 30%, it will be nearly 700000 tons less than that in 2007

2. The international rubber union may limit supply

the international rubber Union will hold a meeting this week to discuss specific measures to support the price of natural rubber. The organization was formed in 2001 by three major rubber producing countries in the world -- Thailand, Indonesia and Malaysia. The total rubber production of the three countries accounts for more than 70% of the total global supply

although officials of IRCO members refused to disclose the contents of the meeting. However, market participants expect that the organization will discuss measures to intervene in the market. Possible measures will include limiting supply in order to reduce the excess of rubber in the international market and turn it into inventory for resale when the rubber price is at a high position. Enlightenment 1: make research and development to the extreme

3 Some Chinese traders defaulted, and the main producing countries suspended quotation to China

the sharp decline of natural rubber caused many domestic traders to suffer losses, and some powerful traders could barely bear the losses, but some small traders began to default, refused to accept the high price ships in the early stage, and some natural rubber "abandoned" by buyers was squeezed in Qingdao port. Shidong rubber, one of the largest natural rubber enterprises in the world, has decided to significantly reduce production to deal with this industry crisis in order to avoid greater losses

dragged down by some Chinese buyers, the Singapore rubber Union will hold an emergency meeting this week to study China's breach of contract; Around the 10th of this month, due to China's breach of contract, major rubber dealers in Singapore, Thailand, Indonesia and Malaysia have stopped quoting to the Chinese market; The domestic Hainan Rubber Association also suspended the release of the price of Hainan natural rubber latex on October 16 in order to avoid the negative impact on the rubber producers and all links of the industry and maintain the healthy and orderly development of the rubber industry due to its stable performance. If China's rubber market continues to be in chaos, China's natural rubber market will face greater difficulties under the pressure of multi dependence in the later stage

second, domestic natural rubber is heavily dependent on imports

at present, China is a large country in global natural rubber demand, and domestic production is far from meeting domestic demand. More than 70% of domestic natural rubber needs to be imported from abroad. At the same time, due to the characteristics of rubber agricultural products (15.95, -0.19, -1.18%, bar), it has a cut-off period. China stops cutting rubber from Yunnan in November and Hainan in December every year. During the domestic cut-off period, domestic demand completely depends on imports and early overstocked inventory. According to the current suspension of the quotation of the main rubber production to China, it will seriously affect the normal supply of domestic natural rubber in the later stage

III. Market Analysis and later outlook

the natural rubber market under the influence of the financial storm fell in a free fall. At present, the price has fallen back to the level when the market started in 2005. Although the European and American auto industry has continued to report layoffs and production stoppages since the beginning of the year, China's auto production has shown a negative year-on-year growth, but the global auto and tire industry has grown rapidly since 2005, The demand for natural rubber is much higher than that in 2005. Even if the automobile and tire industry is no longer growing due to the global financial storm, the expanded production capacity in recent years cannot be ignored, and the global rubber industry will not have a significant oversupply

(predicted by IRSG from 2008 to 2010)

the current season is gradually turning cold, and the global cut-off period will slowly approach. During the cut-off period, the world will mainly consume inventory. If China's current default situation cannot be effectively improved, international rubber traders may join hands to resist violators in the later stage, and if this situation occurs, China's rubber industry will be struggling

at the same time, the sharp decline in the domestic market this round has led to the price of domestic rubber being lower than that of composite rubber, and the price difference between domestic rubber and synthetic rubber has also widened. Some domestic purchases that need to use rubber have begun to buy a small number of batches at this price. Therefore, after this round of Tianjiao slump, it is necessary to re-examine the decline of Tianjiao. The Tianjiao market should not be too bearish in the late stage, and the empty orders that make profits in the early stage can be reduced appropriately

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