China NR Prices to Fluctuate Within a Narrow Range in August
In July, China’s natural rubber prices hovered at RMB 13,000/mt with the fluctuation range of RMB 300/mt. Meanwhile, there was no great improvement in supply-demand imbalance, so the commodity market exerted great impacts on Shanghai natural rubber futures prices.
Supply: Rubber feedstock production structure changed somewhat due to the profit for delivery.
The rubber tapping work started as anticipated in Hainan this year. Rubber tapping work proceeded on a full-scale in Hainan after H2 May, and the field latex output increased quickly. Moreover, the demand for latex was tepid, and the profitability decreased. However, the profit for WF delivery performed well, so the field latex purchase enthusiasm at WF plants was relatively strong. Accordingly, prices of feedstock using for WF production increased greatly. Influenced by the powdery mildew, rubber tapping work started early in Yunnan but proceeded slowly. The rubber tapping rate increased to 80% in Xishuangbanna region in June. Curbed by the intense rainfall, purchase prices of feedstock weakened somewhat. Moreover, producers preferred to produce cup lump due to the low price spread between field latex and cup lump. Meanwhile, the operating rates at processing plants grew slowly due to the unstable purchase prices of feedstock.
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