Shanghai rubber got rid of the weak pattern at the bottom and opened a round of rebound market

Since the beginning of this year, the global economic situation has become increasingly severe, and many countries have successively introduced stimulus measures
to improve liquidity such as interest rate cuts in response to unfavorable financial conditions.
As of the end of August, there have been 25 interest rate cuts in the world, including the Fed cutting interest rates by 25 basis points at the end of July, starting the interest rate cutting cycle
again after 12 years.
At the same time, the probability of a rate cut by the Fed in September is as high as 91.
2%.

In the environment of weak financial environment, China adheres to the implementation of prudent monetary policy, pre-adjusts and fine-tunes in a timely manner, accelerates the implementation of measures to reduce the level of real interest rates, and timely uses policy tools
such as general RRR reduction and targeted RRR reduction.
It can be seen that in the near future, People's Bank of China will release about 900 billion yuan of long-term funds after four years, of which about 800 billion yuan will be released by the comprehensive RRR reduction and about 100 billion yuan
in targeted RRR reduction.
The warmer economy has given a positive signal to the commodity market, which is conducive to the repair
of the valuation of industrial products, including Shanghai rubber.

The August data has improved
compared to the weak production and sales data in July.
According to data from the China Association of Automobile Manufacturers, domestic automobile production and sales reached 1.
991 million units and 1.
958 million units in August, up 10.
3% and 8% from July.
From January to August, automobile production and sales totaled 15.
939 million units and 16.
104 million units, respectively, down 12.
1% and 11% y/y, but the decline was 1.
4 and 0.
4 percentage points
lower than that of January-July, respectively.
According to the China Association of Automobile Manufacturers, the situation of a sharp decline in production and sales in the car market has changed, and the increase began to occur
month-on-month.

At the same time, in the terminal retail link, the inventory pressure of automobile dealers eased
.
According to data from the China Association of Automobile Manufacturers, in August, the inventory warning index of domestic auto dealers was 59.
4%, although it increased by 7.
2 percentage points year-on-year, and the inventory warning index was above the warning line, but it fell 2.
8 percentage points month-on-month, and the inventory pressure was eased to a certain extent
.
With the arrival of the traditional "Golden Nine Silver Ten" peak season, auto show activities are held centrally, and demand is expected to be released
.

In addition, the sales data of heavy-duty trucks, which is a barometer of rubber market demand, also improved in August compared with July
.
According to data from the First Commercial Vehicle Network, in August, the domestic heavy-duty truck market sold a total of 73,000 vehicles of various types, a year-on-year increase of 1.
6%; From January to August, the heavy-duty truck market sold 805,200 units, down 2%
y/y.
The increase in heavy-duty truck sales in August was mainly due to the low base in the same period last year and the vigorous promotion
of automakers and dealers.
Terminal demand is expected to improve, and bullish sentiment contributes to the repair
of rubber price valuations.

In order to boost the persistently low rubber prices, Thailand, the world's largest rubber producer, intends to provide 26 billion baht, or 849.
7 million US dollars, to subsidize rubber farmers to increase their income
.
Although the plan still needs to be approved by the country's cabinet, if implemented, it will benefit
more than 1.
4 million rubber farmers.
The subsidy program will be implemented from October 2019 to September 2020
.
After the Thai government subsidizes the lowest price of rubber products, the rubber price will rise to a certain extent compared with the previous quotation, which will promote the sluggish rubber price to usher in a wave of
upward trend.
Looking forward to the future market, the traditional "golden nine silver ten" consumption season of the car market has arrived, the demand side has shown signs of improvement, coupled with the possibility of introducing a subsidy plan in Thailand, a rubber-producing country, the Shanghai rubber 2001 contract will continue to rise
.