Short-term rubber price volatility focuses on downstream demand

In terms of macro, the price of international crude oil futures continued to rise on June 8, the increase was obvious, under the expectation of tightening supply, the oil market continued to heat up, and the rise in crude oil boosted butadiene and synthetic rubber significantly; On June 9, international crude oil futures closed down, oil prices are still running at a high point, and the fundamentals of supply and demand have not changed much
.
This was mainly driven by a sharp rise in refined oil, and oil prices were supported by tighter supply expectations and demand growth
.
In the context of the country's sustained and stable economy, national leaders require further opening up the arteries and microcirculation of transportation and logistics, strengthening the freight protection of key industries, regions and enterprises, and benefiting the demand
for passenger car tire configuration.

In terms of supply, Southeast Asia and China's Yunnan production area in addition to the rain-induced production affected, the overall rubber tapping is carried out in an orderly manner, Hainan production area has been partially cut, the output is very limited, the news said that the middle of the year or will be fully cut; Recently, the price of thick glue in China's production areas has continued to decline, and data show that the decline has reached nearly 4,000 yuan / ton since June, a decline of about 20%.

In terms of demand, so far this month, some tire companies have stopped work and maintenance to affect the industry operating rate, data show that as of May 31, the domestic all-steel tire production line operating rate reported 56.
1%, semi-steel tire production line operating rate reported 64.
9%, the overall year-on-year increase of +5.
7%.

With the introduction of policies to stimulate consumption of passenger cars in various places, the operating rate of semi-steel tires has been significantly better than that of all-steel tires, achieving a four-week consecutive cycle and year-on-year increase in production
.

Under the leadership of the national policy of stabilizing the economy, many measures such as bank interest rates, automobile consumption, and ensuring the circulation of goods have promoted the demand of the industry
.
On June 9, the Passenger Vehicle Association released the latest production and sales data, showing that passenger car production in May was 1.
671 million units, a year-on-year increase of 6.
5% and a month-on-month increase of 69.
5%.
Retail sales were 1.
354 million units, down 16.
9% y/y and up 29.
7% m/m.
Wholesale sales were 1.
591 million units, down 1.
3% y/y and up 67.
8%
m/m.
Overall, the auto market in May has improved significantly compared with April, and the market generally believes that the production and sales situation of automobiles in June is expected to return to normal
.

In terms of inventory, statistics show that the inventory of natural rubber general trade warehouse and bonded zone in Qingdao continued to decline: on June 5, the general trade inventory of Qingdao natural rubber samples decreased by 202,700 tons year-on-year, a decrease of 41.
2%; The bonded inventory of Qingdao natural rubber samples decreased by 03,300 tons year-on-year, a decrease of 4.
08%.

On the same day, China's natural rubber social inventory was 1.
0487 million tons, down 119,000 tons from the same period last year, a year-on-year decrease of 10.
19%.

There is a greater
chance of entering the destocking cycle again this month or next.

On the whole, macro policies are improving, stimulating consumption policies and improving the circulation conditions of goods; The production of new rubber is limited, and the spot inventory of tianjiao continues to be low; After the resumption of work in Shanghai, the rapid spread of local inventory sales, which is conducive to the circulation and procurement of tianjiao supply, affected by the high inventory of finished tires, tires are mainly consumed in the short term, driven by policies, the operating rate of tire factories is selectively good
.
It is expected that there will be some support in the short-term shock, focusing on the impact of downstream demand improvement and new rubber output on market conditions
.