Review the trend of the natural rubber market in 2023

Review the trend of the natural rubber market in 2023

In 2023, the Thai blend rubber market in China's Shandong market showed a trend of low-level shock and closing higher. Since January, the spot price has been in a downward trend, and it has maintained a narrow range from mid-to-late March to the end of August, and the overall price is relatively stable, and there has been no obvious fluctuation. On the whole, rubber prices in 2023 was at a low level in the past three years for most of the time, and basically remain at a low and weak operating state in the first three quarters, and the rubber market price in the fourth quarter was end at a relatively high level. The annual average price was about 11125 yuan/ton, down 7.64% year-on-year, of which the lowest point of the year was 10470 yuan/ton in early August, and the highest point was 12,350 yuan/ton at the end of December.

In the first quarter, the global natural rubber production area is in the low production period, some production areas are in the cutting suspension period, theoretically, the price of raw materials has cost support, and the domestic downstream is in the ending stage of the "Spring Festival" holiday waiting for the restart, the cost and procurement sentiment have boosted the rubber price, but in the first quarter, the arbitrage window opened, importers’ replenishment  enthusiasm is higher, as the supply continues to arrive at the port, the port inventory began to accumulate, the rise in rubber prices brought suppression.

After entering the second quarter, China's natural rubber inventory continued to climb to a high level, suppressing rubber prices, domestic buying low, reverse conduction to suppress overseas raw material price and it’s difficult to have upward momentum, and the second plate business still has more hoarding of cup rubber, the cost side also dragged the rubber price. From the demand side, the first quarter of the tire market concentrated delivery of early foreign trade orders, capacity utilization rate maintains a high level, after entering the second quarter, foreign trade orders tend to be stable, with the domestic economic recovery momentum is insufficient, the second quarter rubber prices enter into a long-term stable fluctuation stage, the overall fluctuation range is very limited。

In the third quarter, the natural rubber market broke the sideways deadlock, the spot price began to fluctuate upward, during this period, the impact of rainfall weather in domestic and foreign production areas was more obvious, the supply of raw materials was limited, and the cost side of the upward trend was obvious, which supported the strong upward trend of the domestic and foreign natural rubber offers, and the upstream production profits turned from negative to profitable. With the reduction of overseas shipping schedules in the middle of the third quarter, Qingdao inventory began to appear to the inflection point of destocking, and the profit data of downstream factories performed well, driving the start of construction at a high level, boosting market confidence, and superimposing the same products inside and outside the industry.

In the fourth quarter, the quotation of the RMB Thai blend rubber at Shandong market began to show a significant upward trend after entering December, and finally the quotation of rubber in the fourth quarter of 2023 ended with a high offer. In mid-November, the news of the round of storage came out again, and the overall operation of the commodity economy continued to recover to a positive trend, stimulating the bullish sentiment in the market and promoting the upward trend of rubber prices.

In December, at the end of the fourth quarter, rubber once again ushered in a wave of rising hot wind, at the beginning of the month, the northeast Thailand is in the peak production period, the purchase price of raw materials loosened, the domestic Qingdao inventory destocking slows down, which suppressed the rubber price to a certain extent, but the increase in raw materials is still less than expected, superimposed on the southern Thai concentrated latex winter reserve demand increase, the tight overall supply of raw materials increases the purchase price, production reduction is expected to heat up. At the beginning of the month, after a short market adjustment, the rubber prices rebounded upward, superimposed in December in the storage rumors speculation and the southern production areas of Thailand heavy rainfall set off the atmosphere in the field at the end of December, rubber prices continued to rise, and finally in the fourth quarter to, the 2023 rubber trend draws a high closing end.