Shanghai Rubber has counterattacked strongly, and the enthusiasm for doing more has heated up

On Wednesday, Shanghai rubber futures continued to rebound, the main 1901 contract intraday high of 12855 yuan / ton, hit a new high in more than two months, the end of the session closed at 12580 yuan / ton, up 400 yuan or 3.
28%, up 7.
29%
this week.

On the news, since August 17, the worst flooding in a century in the Indian province of Kerala, the Indian meteorological department issued a warning that the weather forecast for the next few days still predicts heavy rains, which may aggravate the floods
.

CITIC Futures analyst Tong Changzheng said that the major floods in the southern Indian state of Kalara may initially affect the production
of about 100,000 tons of natural rubber.
The contraction of India's domestic production will lead to increased imports to Southeast Asia, which will affect exports to China and in turn force the depletion
of domestic stocks.
Although the proportion of 100,000 tons is not large, it may still become the subject of speculation by long funds in the later stage
.

In addition to the sudden positive stimulus, Hu Huajun, a senior analyst at SDIC Anxin Futures, said that yesterday's surge in Shanghai rubber was also boosted by three other factors: First, since the beginning of this year, the price of China's tianjiao has fallen excessively, among which, the spot price of domestic all-latex fell by nearly 20%, the Shanghai rubber 1809 contract fell by more than 26%, and there was a rare phenomenon of discount spot in the past two days; Second, the direct trigger for the rapid rise in futures prices on Tuesday afternoon was the joint statement of the Chinese government and the Malaysian government, as well as the signing of a memorandum of cooperation between Hainan Agricultural Reclamation and the Malaysian Rubber Board, which stimulated investors' enthusiasm for long; Third, the deeper reason for the sharp rise in Shanghai rubber futures prices is the easing
of external disturbances.

From a fundamental point of view, on the supply side, the latest data from the Association of Natural Rubber Producing Countries (ANRPC) shows that the cumulative total output of natural rubber in the main producing countries in Southeast Asia from January to June 2018 was 5455.
7 thousand tons, a cumulative increase of 3.
84% year-on-year, and the growth rate was 1 percentage point
lower than last year.

On the demand side, China's automobile production and sales in July were 2.
043 million units and 1.
889 million units, down 0.
7% and 4% y/y, down 10.
8% m/m, and 16.
9% m/m, respectively, while cumulative production and sales of Chinese automobiles from January to July were 16.
1003 million units and 15.
9547 million units, up 3.
52% y/y and 4.
33%
y/y, respectively.
China sold 110,000 heavy-duty trucks in June, down 3% m/m and up 13% y/y, and sold 669,800 units from January to June, up 15%
y/y.
As of August 17, China's all-steel tire operating rate fell by 6.
17% to 67.
37%, and the half-steel tire operating rate continued to fall by 1.
76% to 67.
07%.

"At present, it is worth worrying investors that China's automobile production and sales have turned down, and the downstream demand for rubber is still sluggish, affecting the sustainability of
rubber price rise.
" Hu Huajun said
.

For the future market, Hu Huajun believes that the Shanghai rubber futures price has fallen excessively in the early stage, the upstream industry has reached a deadlock, and there is a short-term demand
for over-fall rebound.
However, demand in China's downstream industries such as automobiles and tires has weakened, and the huge premium of water in the 1901 and 1905 contracts in the far month has limited the height
of the rubber price rebound.

Ruida Futures analyst Lin Jingyi said that because there is no abnormal climate in major producing countries except India this year, Sky Oak production will increase
with a high probability.
Therefore, the futures price increase is more from the capital rise, combined with the current supply and demand fundamentals, it is expected that the futures price has limited room to rise
.