The Recent Rise in Concentrated Latex is Gratifying, the Reasons Behind It and the Expectations

The Recent Rise in Concentrated Latex is Gratifying, the Reasons Behind It and the Expectations

Since mid-August, the concentrated latex market has ushered in a long-lost upward trend, and the price of ordinary bulk imported from Thailand in Zhejiang market has risen from 9,050 yuan/ton in mid-August to 9,650 yuan/ton in recent days, and it has risen by 600 yuan/ton in half a month, an increase of 6.63%. Since mid-April, the concentrated latex market has basically remained in a relatively stable state, the overall volatility is relatively limited, and the market trading atmosphere has also entered an inexplicable equilibrium state, and the recent has ushered in a wave of rises beyond expectations. The reasons are as following:

1. Weather disturbances in upstream producing areas, high raw material prices and cost support

According to the seasonal rubber production situation in Thailand, the current Thai production area is in the seasonal peak season, rubber output is expected to increase, and the price of raw materials should also appear theoretically declining. But the overall rainfall in Thailand has been more recently, which still has an impact on most regions, and the output of raw materials is less than expected, and has not ushered in the actual peak season, which supports the upward trend of raw material prices to a certain extent.

The situation in Hainan production area is basically similar to that of Thailand. Continuous phased rainfall has hindered the rubber tapping work when it should be prosperous, and the overall output of rubber is less than expected, and the local processing plants continue to raise the actual price of raw material rubber to meet its production requirements. And the actual purchase price has also risen from 11,300 yuan/ton in the middle of the month to 12,200-12,400 yuan/ton at the end of the month, and the support of the cost side has strengthened again.

2. Downstream routine replenishment brings short-wave demand and the market trading atmosphere improves

Recently, I heard that the operating load of the balloon factory has been boosted, and the activities such as tourism, store opening, and festival celebrations are more active, and the selling of finished balloon products has improved, and some factories have begun to carry out the routine replenishment, which has led to the improvement of the trading atmosphere in the Qingdao regional market, and then driven the market price to begin to rise. With the market price beginning to rise in a narrow range and the sentiment of "buying up and not buying down", the concentrated latex market ushered in a wave of improved demand, which in turn also brought certain positive support to the entire concentrated latex market.

3. Recently, the concentrated milk market has begun to weaken, and whether the spot price can continue to rise

After entering this week, the price increase in the concentrated latex market feels like it is in the final stage, and the overall quotation of traders in the US dollar processing plant is relatively stable and has not continued to rise. For the upstream production area, weather disturbance is a force majeure factor, and there is still support for the cost side in the short term. But after all, it is currently in the seasonal peak season of natural rubber, and after the weather improves, the output of rubber will also begin to appear on the volume of expectations, and the cost side support will be weak. For the current downstream factories, the actual production demand has not improved, and many processing plants also said that the obvious improved demand expectation is also relatively weak for the incoming "Golden Sep and Silver Oct". Under the influence of which the downstream factories are more inclined to a cautious wait-and-see state, after the end of routine replenishment, the demand for concentrated latex may also declined for a short time. From the above situation, it is not difficult to see that the price increase of concentrated latex seems to have reached the end. But at present, the spot supply of goods at the port is tight, and the cost side support is strong, and the price of concentrated latex is relatively supported to maintain the current state, and the rapid decline is expected to be weak in the short term.