Lowest Natural Rubber Warehouse Receipt Inventory in 6 Years
Lowest level of warehouse receipts in six years
Natural rubber warehouse receipt inventory at Shanghai Futures Exchange had been climbing up since 2016. The turning point appeared in 2019 when the inventory started to fall. Due to the pandemic, the warehouse receipts inventory was almost halved in 2020. After the beginning of 2021, the inventory has been hovering blow 200kt, less than half of the highest point seen in previous years. There are several reasons for the low level of futures warehouse receipt inventory. First, natural rubber production is disrupted by the unfavorable weather conditions, diseases and insect pets in China’s rubber producing areas in 2021. The overall production schedule is delayed, especially in Yunnan where the output of new rubber has been affected greatly. Secondly, because of the multiple effects of pandemic, the downstream demand for latex has been good, and latex producers can harvest good profits. Thus, their prices to purchase field latex have been higher than those offered by dry rubber factories. They can purchase larger volume of field latex. As a result, SCRWF output can’t improve a lot. As of May 27, the inventory of natural rubber futures warehouse receipts at Shanghai Futures Exchange was 176,490mt, and the inventory of TSR20 futures warehouse receipts was 54,564mt, lower than the same period in previous years.
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