Natural Rubber Daily: Today’s Decline — Don’t Rush to Turn Bearish(Oct 21)

Natural Rubber Daily: Today’s Decline — Don’t Rush to Turn Bearish

On October 21, the Qingdao market STR20 price index for natural rubber stood at $2,560/ton, down $30/ton from the previous trading day.

Supply

Overseas: Weather in northeastern Thailand improved slightly, and factories’ willingness to purchase at high prices cooled. Heavy rainfall concentrated in southern and eastern Thailand, affecting the pace of latex output.

Vietnam is in its seasonal peak production cycle, but persistent evening rainfall disrupted tapping operations. The Tay Ninh production area was significantly affected by rain, and overall actual output fell short of peak-season expectations.

Domestic: No rain in the Yunnan production area yet; prices remained stable, and raw material supply continued to increase.

In Hainan, rainfall disrupted tapping operations, making it difficult to carry out normal production. The pace of raw material release was constrained. Affected by the decline in futures and spot prices, local processing plants narrowed their premium bidding for raw materials.

Demand

According to industry sources, operating rate increases at some enterprises were constrained. Elevated raw material prices dampened tire manufacturers’ enthusiasm for raising production. A few mid-to-large enterprises maintained acceptable operating rates with moderate finished goods inventory, ensuring order delivery and routine product supply.

Futures and Spot Price Overview

Market Outlook

On the cost side, raw material prices continue to provide cost support, forming a floor for rubber prices. On the demand side, downstream tire operating rates continued their post-holiday recovery trend, but finished tire inventory rose slightly. Downstream factories, facing high raw material prices, adopted a just-in-time procurement approach with weak willingness for active stockpiling, resulting in limited demand follow-through.

Overall, fundamental bottom support remains intact, and it is not advisable to turn overly bearish. However, short-term peak-season production expectations continue to cap the rebound space for futures prices. Rubber prices are likely to maintain a range-bound pattern.

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