Q4, 2021 China Natural Rubber Market Focuses
Weather in natural rubber producing areas
In general, October is a peak season for rubber tapping, as the rainy season in China’s domestic producing areas is coming to an end. Most processing plants in Yunnan run at a full load. As for Hainan, attention should be paid to influences of unusual weather such as the typhoon on rubber tapping. The possible extreme winter weather may impact rubber tapping. Thus, attention should be paid to weather in Q4.
A possible turning point of inventory decrease in Qingdao
Since September 2020, the inventory in Qingdao has been decreasing and notched a record low. The import volume declines, due to the container shortage, high freight and weak import willingness. Moreover, downstream plants are inclined to purchase spot resources over outer-month shipload uncertainty concerns. As a result, the inventory in Qingdao keeps dropping. Since September 2021, China’s export volume had increased, though the maritime transport problem lingers, and the decrease in inventory slows. Thus, a possible turning point of inventory decrease may occur in Q4,
Tire market
The low natural rubber price in 2021 was mostly caused by the decrease in demand. In particular, after April 2021, the operating rates at tire enterprises dropped from highs; the tire inventory pressure increased; the domestic demand was soft; tire exports decreased. All these weighed on the natural rubber market. In Q4, China’s tire market will perform better, as the operating rate will increase and distributors will stock up at the end of 2021.
China’s natural rubber prices are expected to go up in Q4, 2021 but are lower than Q4, 2020, and it is predicted that the demand for natural rubber will improve somewhat in Q4.
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