Briefly Talk about Concentrated Latex

Briefly Talk about Concentrated Latex

This year's concentrated latex market ushered in a gratifying upward trend on the eve of "Golden Autumn September" after a long period of silence in the second quarter. Quotation of Thailand imported ordinary bulk on the Zhejiang market rose from 9050 yuan/ton at the mid-August to 10200 yuan/ton in early September. And spot quotation climbing trend maintained for nearly a month, during the period of quotation, it increased to 1150 yuan/ton again, an increase of 12.83%. For concentrated latex, which had weak demand this year, this wave of rising has led to an improvement in the overall market atmosphere. However, this wave of rise in concentrated latex seems to have come to an end in September, and the quotation on the spot market in the past week has basically remained in a relatively stable state, and there were signs of wide expansion between the actual transaction price and the quotation, and the difference in some areas has reached 400-500 yuan/ton. Many people began to question the concentrated latex market: Is the price still rising? Is there really little supply? What about the demand? Then let's talk briefly about the recent supply and demand situation of concentrated latex.

Supply: Frequent rainfall in domestic and foreign producing areas, and the cost side has support

Recently, processing plants both in Thailand and China have different degrees of rainfall impact. Thailand has not only rainfall impact. In order to make up for the early empty orders, News showed that some processing plants pay high premium price of raw material, which caused the actual purchase price of rubber cup increased to 44.5 baht/kg, forming a significant support to the price of raw material.

As the main production area of China's concentrated latex, Hainan seems to experienced more obvious impact of rainy weather. According to the seasonality of natural rubber output, the current Hainan production area should be in the peak production stage, in the same period of previous years, the overall output of glue raw material can basically be maintained at more than 6000 tons. But in recent times, the daily production of rubber on the whole island in Hainan production area is basically only about 2000-4000 tons, the overall output of raw materials has decreased significantly, and then to meet its production requirements, the grabbing of raw materials between regions and factories has also begun to show. The actual rubber purchasing price has been maintained at about 13,200 yuan/ton recently. According to the actual purchasing price of rubber, it does bring support to the finished concentrated latex product from the cost side. However, some concentrated latex factories said that at present, there are few raw material and high prices, but the actual transaction price and demand do not match the high raw material prices, which affects the procurement sentiment in the short term.

Demand: The market transaction has indeed improved, but most of them are tentative purchases

Judging from the current production situation of downstream enterprises, the overall situation is relatively stable, and a few enterprises has improved slightly and relatively. Among them, when it comes to production, taking foaming as an example, up to now, the foaming plant is still in a state of almost 4 percent. And after entering the traditional "golden Sep. and silver Oct.", the overall starting situation has not improved as scheduled. As far as its raw material inventory is concerned, the start of the goods has not improved significantly, and the overall stock of the processing plants is relatively small, but after the market price has changed from an upward trend to a stable sideways state, the market transaction and inquiry situation has shown signs of improvement. But actually, their procurement replenishment is more of a tentative replenishment procurement, and has not reached the state of on-demand procurement, and the downstream counter-sale or price reduction situation has appeared. Therefore, there are indeed transactions in the market, but the transaction volume is small, and the actual transaction price has great difference compared to the quotation.

Summary: Supply support is mostly disturbed by weather, and actual demand is weak and difficult to change

At present, when it comes to the supply side, mostly because of weather disturbances, there is less raw material output, supporting high raw material prices. But we also know that after frequent rainfall, the weather would be better, and the overall rhythm of raw material will also improve. According to the seasonal output of natural rubber, the weather will improve in the later period, and the amount of raw materials is expected to be larger, so the support on the cost side may be slightly insufficient. This year, the downstream demand for concentrated latex has been in a weak state, and some downstream products have also begun to explore new integration changes. But in the absence of obvious growth points, it is difficult for downstream demand to change its weakness. To sum up, the follow-up increasing room for the spot price of concentrated latex is also relatively limited. If the downstream maintains a tentative replenishment rhythm for a long time, beware of a decline in spot prices. While, the low level support of 9,000 yuan/ton imported Thai bags is also relatively strong, so do not panic too much.