China in the second half of 2005, natural rubber market situation and outlook

In the second half of the domestic rubber consumption to continue strong growth, not the national macro-control and a sharp contraction. Preliminary estimates, in the second half of Chinese natural rubber consumption will not be less than 900,000 tons, an increase of 10%.

First, pressure on the supply of resources is not a small

In the second half of the supply of resources in the following areas:

1, the new listing of plastic flow. By the climate and geographical conditions, China's natural rubber output in the main part of the realization of the second half, accounting for about three-quarters of the year's low yield. For more than two years of rising prices and stimulate domestic production of rubber growers, natural rubber production will increase steadily.

It is worth noting that this year's domestic production of synthetic rubber strong growth. 1 to April cumulative production reached 485,000 tons, representing growth of 20.3 percent over the same period last year. The new increase in the Consumer share of rubber, synthetic rubber have been more diverted. This situation is expected in the second half will be no major changes in the price of natural rubber on the high side of the market competitiveness will be further weakened.

2, the volume of imports to maintain a larger scale. China 2004 natural rubber import quotas have been liberalized, import control has been greatly relaxed. The first 4 months of this year, China imported a total of the various types of natural rubber (including latex, the same below) 440,000 tons, a monthly average of 110,000 tons, close to the general level of import in the same period last year. Subject to a number of factors, rubber products used by enterprises Jin Koujiao far below the actual cost of the Shanghai Futures Exchange's futures contract price, far below the current spot price in the domestic market. If the second half of domestic natural rubber futures and spot prices remain at present levels, then the rubber enterprises through various channels but also the use of more low-Jin Koujiao, Jin Koujiao will also take on the main domestic consumer market share. In such a case, the whole year is expected to natural rubber imports will not be lower than the level of last year, of which imports in the second half of the more than 600,000 tons.

3, dominant stock "rescue." To the end of May, the Shanghai Futures Exchange's dominant stock more than 200,000 tons, this part of the natural rubber in the second half of the year will be a considerable number of futures from the warehouse into the spot market. First place in the futures warehouse for too long, made of plastic for more than 12 months, Jin Koujiao more than 18 months, no longer meet the conditions of delivery. Second, if the futures prices in the second half of fallen too far, will also attract a large number of cash and rubber enterprises to enter the futures market purchases. Due to this part of a huge quantity of rubber (as much as 250,000 tons, nearly half of the annual output), a single species (mainly social needs of the less standard plastic # 5), the lower the price (not lower than the spot price of users there will be no Attractive), and the market focused on the time (in the second half months).

This calculation, natural rubber in the second half of the amount available resources to achieve it will be possible in the 1,000,000 tons more than the same period in excess of the social demand.

Second, the market price severe concussion

On the one hand, the relationship of supply exceeding demand in the market prices continued to callback requests. Pre-natural rubber prices fell sharply despite a 3000 yuan / ton or so, but it did not meet the requirements of supply and demand fundamentals, the most obvious is based on the stock futures continued to grow. On the other hand, are influenced by many factors, the financial strength to support the wishes of the very strong bull, plus the structure of the position, the relative concentration of long, short and dispersed, "more money than the goods," the characteristics of the market is also conducive to long Bicang . This pattern will make the second half of the price will be inevitable severe concussion.

We would also like to see in the future of China's natural rubber consumption is still in a strong growth pattern, the pace of world economic growth is also accelerating. From the second half of the situation, the State Council, it is necessary to protect the good momentum of economic development, the national economy will also be expected to maintain a rapid growth rate, the car is not a small-scale production, significant increase in road transport, rubber products exports also Active. In addition, from a variety of rubber consumption structure, the state again in the near future to strictly limit the overloading of the road, the objective will be to stimulate the use of bias tires to increase the domestic standard # 5 plastic consumption. Rubber prices decline, but also conducive to increasing the use of rubber consumption. Moreover, the supply of natural rubber affected by natural conditions, a longer cycle of expansion, it is difficult in the short term dramatic increase in supply. China's emergence marked # 5 plastic situation of supply exceeding demand, it is only under special circumstances of the emergence of local problems, not universal. At the same time, high oil prices on the international market, the cost of production of synthetic rubber rising prices for natural rubber is also a support. All this makes the price of natural rubber will not enter the "winter." Natural rubber prices fallen too far, the futures will allow storage of a large number of dominant stocks, real quickly into the field of production and consumption. As a result, the rubber market will greatly alleviate the pressure on the stock, from the real supply and demand fundamentals, rather than funds futures prices reach the bottom surface of the rebound.

Third, in the second half of the overall market outlook

Supply and demand continue to improve. 4 from the 2004 quarter, domestic rubber consumption to keep the market strong demand for new resources to increase slightly or even decline, the market supply and demand improved, in 2004 carried over to absorb a large number of excess inventory, resulting in the preceding period of price Up. Is expected in the second half of the rubber supply and demand will continue to improve.

Increased uncertainties. Although the second half of the Chinese rubber market supply and demand continues to improve, but it does not necessarily mean that market prices will firm up. Domestic natural rubber production season just around the corner, growing a new listing of natural rubber price trend will have a pressure. In addition, the U.S. dollar and the RMB exchange rate to appreciate or uncertainty, but also to the rubber market in the second half to add a lot of variables.

The improvement in the fundamentals of natural rubber, synthetic rubber production costs increase, the two types of rubber upside down prices and exchange rate changes are intertwined, making rubber prices in the second half again more volatility even more possible.

In short, with the abolition of China's natural rubber import quotas and import liberalization measures to implement the right to operate, our country is bound to occur in the last two years, natural rubber imports increased. Coupled with the end of 2003 before opening up the country's domestic enterprises the right to operate import and export trade, more manufacturers will be able to import rubber. China will face a short period of time rubber Jin Koujiao the impact of the influx. However, the long-term point of view, China's rubber market continued growth in demand for plastic production and the country's own consumption and production limitations, the increase in imports will not cause long-term domestic rubber market pressure. Volatility for the time being, the domestic rubber market will return to the normal operation of the track in the past.