Largest Price Spread Between Mixed Rubber and Natural Latex
In the past five years, the price spread between mixed rubber and natural latex was over RMB 1,000/mt, except that the price of mixed rubber was more than RMB 2,000/mt lower than the price of TVR in bulk in the second half of 2020. However, heading into 2021, the price of mixed rubber was higher than the price of TVR in bulk. Up to the end of December 2021, the price spread between mixed rubber and TVR in bulk reached RMB 2,800-2,900/mt, notching a fresh high since August 2017.
Reversed V-shaped trend of mixed rubber inventory from 2020 to 2021
From 2020 to 2021, the inventory inside Qingdao Bonded Zone kept dropping, while the inventory for general trade first rose and then declined. Especially the continuous inventory building resulted in the highest inventory for general trade of more than 700kt in December 2020. Accordingly, the mixed rubber price went down. By comparison, the price of natural latex rose, as abnormal climate led to an unsmooth supply of the feedstock field latex and the support from the downstream demand was strong.
The different price trend of mixed rubber and natural latex
Heading into 2021, especially after March, the continuous de-stocking of inventory for general trade was seen. By the end of 2021, the mixed rubber inventory declined to 227.8kt, down 64.71% from the highest early this year. The continuously low inventory and unsmooth marine logistics caused insufficient supply. Therefore, the mixed rubber price rose. As for natural latex, the natural latex market price remained in a downtrend, as the downstream demand decreased and the pandemic prevention and control led to lukewarm downstream production. Accordingly, the price spread between mixed rubber and natural latex kept widening and hit a four-year high.
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