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RUBBER NEWS INT'L: Natural rubber “disasters and hardships” in 2019 December 26, 2019
(Last Updated: 27 Dec 2019)

 

 

Natural rubber “disasters and hardships” in 2019

 First, the price

According to the monitoring data of the business agency, compared with the price of more than 40,000 a ton, the natural rubber that has fallen by three-quarters in price has fluctuated around 2,000 yuan / ton at a low price of 10,000 yuan / ton to 12,200 yuan / ton More than half a year. In 2019, the price of natural rubber as a whole surged three times: 12070 yuan / ton on March 4 was the first price high, 12020 on June 11 was the second price high, and 12290 yuan / ton on December 6 was the first Three times is also the highest price of the year so far; two downward troughs: 10700 yuan / ton at the end of April and early May is the first trough price, and 10260 yuan / ton at the end of July and early August is the lowest price this year. Throughout 2019, the mainstream average price of natural rubber whole milk (Treasure Island) market monitored by the business agency in East China was 10650 yuan / ton on January 1, and 11,940 yuan / ton on December 24, an annual increase of 12.11%; of which, this year The highest price was 12290 yuan / ton on December 6, and the lowest price was 10260 yuan / ton on August 2. The annual maximum amplitude was 19.79%.

In the first half of 2019, the rubber industry has experienced droughts that have not been encountered for many years. It has also undergone strict inspections by the customs for “mixed rubber”. It has also encountered export reductions from other three Southeast Asian countries and other rubber boosting measures. The response to the industry is reflected in rubber The price surged, fell, and fluctuated; in the second half of the year, it continued to fluctuate, experiencing the traditional peak season of consumption of “Golden Nine, Silver and Ten”, coupled with the impact of heavy rain and fungal diseases in Southeast , production is limited, and the natural rubber market has improved. In January, China ’s domestic production area started to enter the cut-off period. At this time, funds gradually favored natural rubber, and it rose sharply on the beginning of the second half of the day. Natural rubber finally stopped rising and raised funds ’attention. Since then, the trend has fluctuated. After a short-term correction, it began to rise again in December. It reached the highest price level in 2019 on the 6th, but the price has plummeted due to a large increase in domestic inventory on the 18th. It has ended in December and will soon become history in 2019. Natural rubber shocks continue.

Factor analysis

Raw material supply: In recent years, the global natural rubber has been at its peak production capacity, as shown in the figure above, mainly because the cutting area of ​​rubber has been steadily increasing since 2003. The ANRPC data show that the area cut in 2003 was about 6.19 million hectares, which has risen to 9.06 million hectares in 2018, an increase of 46.36%. The area of ​​new rubber species reached its peak in 2012. According to the 7-year growth cycle of rubber, the corresponding cutting period is in 2019. According to statistics, the area cut in 2019, except for , which fell by -2.2%, basically maintained growth in other countries. Among them, Thailand increased by 4.9%, Malaysia increased by 7.2%, India, Vietnam and China increased by 15.7%, 3.2% and + 2% respectively. Cambodia’s increase was as high as 26.1%. However, due to the long-term fluctuation of  between 10,000 and 12,000 yuan / ton in recent years, the price has fallen to a quarter of the highest price in the past ten years. The low  has affected natural rubber planting and harvesting. Annual growth slowed. In addition, in 2019, domestic and foreign rubber producing areas first encountered drought, rainstorm fungal disease, and tapping costs and other factors. Among them, the severe drought that has not happened for many years slowed the growth of gum trees, which may delay and shorten the tapping period. The lack of water has reduced the production and regeneration rate of glue, and the yield has decreased significantly. Indonesia, Malaysia, and Thailand have been attacked by fungal diseases before and after, and their production has been severely affected. Indonesia has about 382,000 hectares of rubber plantations, especially Sumatra and Kaliman. Some parts of Denmark are particularly serious. Indonesia’s natural rubber production in 2019 is expected to decrease by 15% compared to 3.76 million tons in 2018. And Thailand, the world’s largest producer and exporter of natural rubber, accounts for 40% of the global rubber supply, and rubber parks with an area of ​​more than 330,000 rai have suffered from fungal disasters. Some people believe that local natural rubber production may decline by 50%.

The ANRPC report shows that in the first half of 2019, the total global natural rubber production fell by 8.3% year-on-year to 5.853 million tons. The countries whose  decreased include Thailand (-15.7%), Indonesia (-12.0%), China (-17.1%), and India ( -4.1%) and the Philippines (-1.3%). From January to July, the global natural rubber (NR)  was 7.039 million tons, down by 7.3% from 7.591 million tons in the same period of 2018. The industry generally estimates that global natural rubber production will decline by 5% year-on-year in 2019; ITRC believes that in 2019, rubber production in Thailand, Indonesia and Malaysia is expected to decrease by 800,000 tons.

In terms of inventory: As shown in the figure above, the domestic natural rubber stocks in 2019 will basically remain at a high level of more than 400,000 tons, until November 25th, the old warehouse receipts of the natural rubber in the previous issue were collectively cancelled: according to data released by the Shanghai Futures Exchange in early November About 320,000 tons of old  warehouse receipts will be collectively cancelled, accounting for about 76% of warehouse receipt inventory in early November. On November 25th, the old  warehouse receipts were officially cancelled. On the same day, 295,200 tons of warehouse receipts flowed into the spot market, and the warehouse receipts inventory also dropped to 165.74 million tons, which was the second lowest level after the warehouse receipts were cancelled in the past 5 years, and the cancellation volume was far Over the past years, the pressure on warehouse receipts has been released intensively, and Hujiao has a rising base. This is the best inventory change news for the market since 2019.

In terms of import and export: As shown in the figure above, China’s customs data shows that from January to November 2019, China’s natural and synthetic rubber (including latex) imports were highest in January and November, and lowest in February and June. Affected by the Chinese New Year holiday in February, manufacturers stopped working and employees were on vacation, and the overall operating rate was low. In June, there was a notice from China Customs on April 30 on the strict inspection of “mixed rubber” Issue a notice requesting that the mixed rubber currently imported through the customs number 40028000 customs declaration needs to be verified as a mixture of natural rubber and synthetic rubber. For rubber mixtures with only synthetic rubber on the surface, they must be declared and taxed according to 4001. 30 days, the notice After spreading in the industry, rubber futures rebounded strongly, short positions were lightened, and they rose by 400 yuan / ton on the day, an increase of over 2%. Malaysia and Malaysia have decided to jointly reduce the export volume of 240,000 tons of natural rubber to boost rubber prices. Since April 1st, Indonesia and Malay have implemented the agreement as scheduled; Thailand has been postponed due to the March general election, and May 20th to September 19th. To implement this measure, the plan is valid for 4 months, and June is the month in which the three countries simultaneously implement the plan). The latest data show that natural and synthetic rubber (including latex) imports were 5.848 million tons in January-November 2019, a decline of 7.8% compared with the same period in 2018.

Downstream demand: In recent years, China’s tire industry has grown rapidly, and its output has consistently ranked first in the world since 2006. The total tire production capacity accounts for 35% of the global total production capacity, and exports account for about 50% of the total output. As shown in the figure above, China’s tire tire production in 2019 is in a continuous growth trend. However, the rapid development of the tire industry has also caused some concerns about blind investment and overcapacity. The development of the automotive industry and the upgrading of market demand have put forward higher requirements for the technical performance and technological content of tire products. Driven by the new model and other factors, China’s tire industry has entered a critical period of transformation and upgrading. In 2019, China’s downstream tire companies experienced a severe industry integration period, and dozens of rubber tire companies went bankrupt and were auctioned. The defense of the blue sky, the country is very strict on environmental protection controls, and also strict inspection of tire companies. Data show that the prosperity of the automotive industry in 2019 is still low, but the sales volume of heavy trucks has continued to increase in the second half of the year, driving the price of rubber higher. In November 2019, China’s heavy truck market sold about 94,000 vehicles of various types, an increase of 3% month-on-year and an increase of 5.3% year-on-year. This is the fifth consecutive month of heavy truck market growth since July 2019. From January to November, the cumulative sales volume of the heavy truck market was 1.0744 million, a year-on-year increase of 1%. The market predicts that the overall sales volume of the heavy truck market in 2019 is expected to exceed 1.15 million units, thereby setting a new record for the annual sales of the heavy truck industry in China. The analysis points out that the heavy truck industry has a high degree of prosperity, sales continue to increase, and the  is maintained at a high level. The main driving factors are the continuous increase in road transport demand and the strict implementation of heavy truck related systems. Retirement only provides cash  for heavy trucks that meet the “National III” and below emission standards, and some provinces and cities have banned the transportation of chemical products from vehicles below the National Level 5.

Business Society natural rubber analysts believe that the natural rubber market in 2019 is in the domestic shutdown season, full-year output is expected to tighten, there are downstream drivers of continuous growth in heavy truck sales, and there are long-term futures inventory cancellations Relatively low volume, which should be a positive factor for the long-term downturn in the natural rubber market. Natural rubber does not have the possibility of a big drop. The short-term counter-storage rushes to the high rebound trend. In the long-term, the supply and demand structure changes. The long and short rhythm needs to be accurately grasped. In the coming market, the Chinese traditional Spring Festival is approaching. The suspension of labor unions will cause holiday effects. The pre-holiday period is usually the stocking period. At this stage, natural rubber may rebound for a period of time. You can also pay attention to automobile consumption before the holiday. In the spring production season, the domestic cut-off period was still at that time, relying entirely on inventory and natural rubber supply in Southeast Asia, focusing on the impact of Southeast Asian weather and unexpected news on the market. As for the natural rubber market in 2020, based on the suppression of the current low price for many years, although the surge in rubber prices in the future is unpredictable, once the news stimulates and the impact of policies has caused a sharp surge in prices, it can always be expected.

 

Translated by  from http://www.cria.org.cn/newsdetail/52365.html

 

 

Top natural rubber producers consider more export curbs -ITRC

JAKARTA, Dec 5 (Reuters) – The International Tripartite Rubber Council (ITRC), which includes top producers Thailand,  and Malaysia, is considering another export curb to help stabilise , the group said in a statement on Thursday.

The Agreed Export Tonnage Scheme (AETS), will “anticipate any unfavourable  conditions in the future” the group said after a  in Jakarta.

The ITRC reduced exports by 441,648 tonnes under the AETS earlier this year, more than the targeted cut of 240,000 tonnes.

 Association Chairman Moenarji Soedargo said the extension of AETS was not discussed in an August meeting of the group because output was expected to decline as a disease hit rubber plantations in parts of Indonesia.

 

The ITRC said 2019  was expected to fall by 800,000 tonnes due to an outbreak of the Pestalotiopsis fungal disease, erratic weather conditions and sluggish tapping activities after a prolonged spell of low .

The fungal disease has affected 380,000 hectares (939,000 acres) of rubber plantation in Indonesia, 52,000 hectares in Thailand and 5,000 hectares in Malaysia, according to Thursday’s statement.

In the worst cases, the disease can reduce production by 70% to 90%, the ITRC said. (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy; Editing by Kirsten Donovan)

Seed imports banned as fungal disease hits Thai rubber trees

 The outbreak of a fungal disease that weakens rubbers trees in Thailand has led to the halt of imports of rubber seeds, seedlings, and saplings into Myanmar, local authorities announce.

Following the outbreak of the Pestalotiopsis sub species fungal infection of Thai , rubber seeds, seedlings, and saplings will not be allowed through local airports and border gates, the Crop Protecting Unit of the Department of Agriculture said.

The Pestalotiopsis fungal disease has spread in some rubber plantations in Thailand, so precautionary measures have to be taken to protect Myanmar’s rubber trees. Additionally, imports of rubber seeds, seedlings, and saplings from other countries will also be halted, said U Win Zaw, head of the Myeik District Agriculture Department.

The ban, which affects not only Thanintharyi Region, but the whole country, remains in effect indefinitely.

“The current announcement will be effective until the next one is issued. All people need to abide by it,” said U Win Zaw.

The outbreak of the fungus does not affect the rubber market and imports of raw rubber and rubber latex are still allowed without restriction as before, he said.

A rubber tree that has been invaded by the pestalotiopsis fungus will lose its leaves, produce less latex of poorer quality, and eventually.

“The rubber market has been poor for a long time and there are only a few growers these days. Sellers are not interested in it so the ban has little impact,” said a Myeik resident and rubber plantation owner U Myo Zaw Min. He said rubber  is low in Myeik and some plantation owners have stopped extraction of latex because they can’t even cover production costs.

According to some rubber growers, the fungus has also spread in , Thailand, Malaysia and  although this has not been confirmed. – Translated

Malaysia: Rubber industry to contribute RM41bil in 2020

 

SUNGAI BULOH: The rubber industry is expected to contribute RM41 billion in 2020 from RM40 billion estimated for this year, driven mainly by the downstream sector including rubber glove, according to Minister of Primary Industries Teresa Kok.

She said it was in line with rubber glove industry projection that export revenue would likely hit RM20.68 billion in 2020 from the RM18.2 billion expected in 2019.

On this note, she urged the Malaysian Rubber Board (MRB) as custodian of the industry to continue commercialising its research and development (R&D) projects to boost the income of the country, while benefiting smallholders.

“The MRB should continue with its R&D particularly in the downstream industry and strive to be an innovative organisation.

“It must be at the forefront of major changes in order to remain competitive, on par or better than other natural rubber producers,” she said at an MRB Innovation Award presentation here today.

Kok further noted MRB’s accomplishments in R&D that have propelled Malaysia as a leading world producer of high quality rubber-based products.

 Meanwhile, the minister acknowledged MRB’s success in winning one  award and two  awards at the International Invention, Innovation and  Exhibition (ITEX) 2019.

She encouraged MRB to continue with its R&D in -driven activities which smallholders could capitalise on.

“In other words, I hope the industry, estate operators and smallholders could benefit from MRB’s R&D from the aspect of increased productivity and development of high quality marketable rubber-based products,” she added.

Thailand approves US$792 million in subsidies for rubber farmers, the biggest casualty of US-China trade war

  • Thailand, the world’s largest rubber producer, has seen its exports plummet as the tariff war between Washington and Beijing rages on
  • In addition to providing short-term income guarantees to farmers, the Thai government is also looking to widen its export markets to reduce reliance on China.
  • Thai cabinet on October 15 approved a 24-billion-baht (US$792 million) budget for the first phase of income-guarantee subsidy for rubber growers.

    The scheme aims to ensure 1.4 million rubber farmers have a stable income for six months, until March next year. It comes as rubber farmers have been hard hit by the 
    US-China trade war
     that has depressed global demand and pushed down prices.
     

    Thailand is the world’s largest producer of rubber. Rubber tappers in the country, who harvest latex at night or before dawn, refer to the liquid that seeps out of trees as “white gold”.

    But since Washington and Beijing began a series of tit-for-tat tariffs last year, Chinese demand for rubber has plummeted.

    Rubber exports to 
    China

     fell 15 per cent in the first nine months of this year compared with the previous year.

    In 2018, the rubber export value to China was 62 billion baht, compared with 39 billion baht between January and September this year.

     

    Thai rubber exports to China are mostly rubber blocks for tire manufacturing.

    As mainland China car sales fell for the 15th straight month in September amid the trade war, Thai farmers are finding that the “white gold” can no longer guarantee livelihoods.

     

    The government’s subsidy scheme guarantees the price of premium grade rubber sheets at 60 baht per kilogram, latex at 57 baht per kg, and cup lumps at 23 baht per kg. The maximum guaranteed amount will not exceed 240 baht per kg for each 1,600 sq m per year, and will be limited to 40,000 sq m per farmer.

    While many see this measure as an attempt by the coalition government to fulfil its campaign promise, the short-term guarantee of income is one of only a few things that Thai rubber growers can count on

    Suranee, a rubber farmer in northeastern province of Srisaket, said many have “changed jobs or diversify income by growing other crops too”.

    Suranee is one of the many people in Thailand’s northeast who began rubber farming in the mid-2000s following the government’s bid to tackle poverty by expanding rubber farms at a time rubber prices were flourishing, partly due to China joining the World Trade Organisation in 2001.

    Before that, rubber farming was concentrated in southern Thailand for almost a century. Its warm climate and shorelines ensured Thailand’s competitiveness both in terms of quality and quantity of rubber produce.

     

    In recent years, China has begun to directly source rubber in Southeast Asia, mostly through partnership with local producers in several countries.Chaiya Kongmanee, economist

    A Thai worker cuts out stains from a raw rubber sheet at a factory in Rayong province. File photo: AFP
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