Recent market analysis has revealed a substantial surge in the spot prices of natural rubber in China over the past week, indicating a robust trend that is likely to impact the tire industry. As of September 18, domestic natural rubber prices hovered around RMB 16,237 per ton, marking a notable increase of 6.60% compared to the previous week.
The upswing in rubber prices can be attributed to multiple factors. Firstly, adverse weather conditions across both domestic and international producing regions have significantly hindered the supply of raw materials, driving up costs. The poor weather patterns have disrupted the normal flow of natural rubber, leading to a shortage in the market and subsequent price hikes.
Secondly, the declining inventory levels of natural rubber in China have further bolstered prices. This trend, coupled with steady production rates in the downstream tire industry, has created a robust demand base for natural rubber. Underpinned by China's policies aimed at promoting automotive consumption, the tire sector has maintained a stable operating rate, ensuring continuous demand for natural rubber.
Specifically, as of September 13, semi-steel tire production loads at Chinese tire enterprises stood at approximately 79%, while those for all-steel tires in Shandong Province reached around 59%. These figures highlight the sustained activity within the tire manufacturing sector, which in turn, provides a solid foundation for natural rubber consumption.
The combination of cost pressures stemming from raw material shortages and robust demand from the tire industry has resulted in a significant upward movement in natural rubber prices. This trend is expected to persist in the short term, with both cost and demand factors acting as key support mechanisms for the market.
In light of these developments, analysts predict that the natural rubber market will continue to experience bullish movements, with prices remaining elevated. Consequently, the tire industry is likely to face increased production costs, which could potentially translate into higher prices for consumers. Manufacturers and retailers alike are advised to closely monitor market dynamics and adjust their strategies accordingly to navigate this period of volatility.
