Chinese tire companies have resumed operation after a fortnight holiday break for the Spring Festival (February 8) and the Lantern Festival(February 22). The operating rate has basically restored to the level for the holiday. In general, semi-steel tire plants show better performance than all-steel tire companies.
As the foreign rubber producing areas have stopped rubber tapping since the second half of February, natural rubber supply in the month is estimated to fall.
In terms of inventory, despite net outflow of inventory at Qingdao Bonded Area for two weeks running, the absolute inventory remains relatively high. Meanwhile, records have been refreshed for inventory at the commodity exchanges. Moreover, inventory at Japanese ports continue to soar.
On the whole, the current supply and demand fundamentals fare better, but inventory pressure cannot be taken lightly.
In the short term, rubber prices on foreign markets are anticipated to remain steady andthe odds are low for domestic prices to keep falling. Looking forward, market playersmay keep an eye on whether stabilizing demand can drive up spot prices.
