The Natural Rubber market in China registered mild fluctuations in the first half of August

In the first half of August, China's natural rubber market remained stable, experiencing a slight decline. Domestic Baodao full latex prices in East China decreased from 12,010 RMB/ton at the beginning of August to 11,774 RMB/ton by the 15th, reflecting a 1.97% decrease. Throughout this period, the market remained largely flat, with prices averaging around 11,895 RMB/ton from August 8th to 13th.

In the context of historical data, the current rubber market in China is at a relatively low level. Shanghai rubber, representing the broader market trend, has shown minimal fluctuations. The most notable movement was a slight continuous decline in recent days, with daily adjustments modest, at around 50 RMB/ton.

Request Access To The Latest Price Trends of Natural Rubber

On the supply side, global new rubber production is on an upward trend during its peak season, although this growth is potentially tempered. Recent heavy rainfall in Southeast Asia has disrupted production. Additionally, persistent low latex prices in major rubber-producing nations and natural disasters earlier in the year in China, including droughts, have had a tangible impact on rubber production.

Inventory data presents an interesting picture; despite downstream enterprises engaging in on-demand procurement, high levels of rubber remain in storage, indicating sustained supply pressure. This is further exacerbated by the slow pace of rubber spot inventory deliveries, contributing to the high storage problem that the industry is currently grappling with.

On the demand front, tire manufacturers in China have continued consistent purchasing according to orders, and shipments of tire products remain steady. Notably, while semi steel tires maintain a high and relatively stable operating rate, all steel tires are facing significant production and sales pressures, although their operating rates have recently improved.

Lastly, in terms of imports, the recent shift in the RMB/USD exchange rate, surpassing the 7.3 mark, has escalated rubber import costs in China. This scenario, which effectively inverts profit margins, is likely to relieve some pressure on rubber imports in the short term.

Read More About Natural Rubber Production Cost Reports - Get a Free Sample Copy in PDF

According to Procurement Resource, in the first half of August, China's natural rubber market remained largely stable with a slight decline. Prices of Domestic Baodao full latex in East China dipped from 12,010 RMB/ton to 11,774 RMB/ton, a 1.97% decrease. Supply pressures persist due to high rubber inventories, despite growing global production. On the demand side, tire manufacturers continue steady purchasing, with semi-steel tires maintaining high operating rates. Recent shifts in the RMB/USD exchange rate, now surpassing 7.3, have increased rubber import costs, likely offering some relief to import pressures.