By supply and demand fundamentals are bearish factors, the recent unilateral Hujiao continuous fall, where the main contract RU1509 on July 8 record December 12, 2014 low of 11,725 yuan more than six months since the full low 11,910 yuan, compared with June 1 day high of 15,245 yuan fallen 3335 yuan, down 21.88 percent, thereby expanding large downside.
The supply side, Hainan Province, the drought-affected gum forest area of about 80 hectares, of which Hainan State Farms Group has nearly 40 million mu of forest affected gum. Since late May, resulting in Hainan province’s drought dry rubber production decreased over 10,000 tons. June 12, listed companies in Hainan Rubber announced that the company has to arid areas as a temporary rubber tree cut off, the drought will be the company’s rubber production is expected to have some impact. In addition, Hainan Central region is still 10% — 20% of the gum forest was abandoned because rubber prices slump cut.
To curb rubber prices continue to decline, the Vietnamese Ministry of Agriculture and Rural Development, Rubber Association and with enterprises and related national efforts to rescue the market, since May, the country’s domestic and export rubber price is getting warmer, the average SVR 3L variety export price $ 1,655, up 73 dollars, or 4.6%. Currently, natural rubber exports to China reached a daily 900 tons, the price has risen to 9900 yuan.
Analysts believe that the smaller the effects of drought in Hainan, a decrease of only 1-2 tons. Vietnamese rubber in the global rubber market share is small, less profitable. Thailand cuts not change the reality of the main producing countries increase, the year is expected to maintain steady state rubber supply.
Consumption, recently, the US Department of Commerce final results concluded that imports from China passenger car and light truck tire dumping and subsidization. US Department of Commerce declares that Chinese exports to the US passenger car and light truck tire dumping and subsidization, dumping margins from 14.35% -87.99% subsidy rate of 20.73% -100.77%.According to the procedure, before the formal charge “dual” tariff, the US International Trade Commission needs to make the final ruling. If the agency has made sure of the final ruling, the US Commerce Department will ask the relevant customs official to impose “dual” tariff.
In May, China’s car sales fell the second consecutive month. Auto production and sales fell by 6.2% and 6.9%, respectively, a decline of 5.6% and 4.6% to 1,964,200 and 1,903,800, respectively. Following the April were down 8.9%, respectively, and 11% after five monthly sales both fell to below 2 million. Dealer inventory early warning index was 57.3%, although the chain fell 3.2%, but an increase of 8%, is for 8 months is above the warning line. While July and August are the lowest in a year market growth, but also the traditional consumption season. Overcapacity issues highlighted, even by Chinese car sales growth of 7% this year, estimates, car sales of about 25 million, but statistics show that this year China’s automobile production capacity will reach 40 million, which will have 15 million capacity has been idle. By 2020, there will be at least 20% of car prices out, there may even be a third of car prices was eliminated.
Chinese tire industry while weak domestic and export suffered a double blow sanctioned action, while trapped in the boom of the low position, the upstream raw material procurement efforts will gradually weaken, while the overall auto industry faces oversupply, industry will gradually slow to raw materials supporting role will increasingly weak.
