Chemical warehouse of the company
Natural rubber prices may fall by the end of August as investors sell for profit after a recent sharp rise, but recovering demand from Chinese tire makers could limit the downward trend, according to a Reuters survey.
Ten reputable traders and analysts interviewed forecast the average price of rubber futures on the Tokyo Commodity Exchange (TOCOM) to be 185 yen per kilogram by the end of August 2009. That is higher than the 163 yen per kilogram forecast in July, but much lower than the 208 yen per kilogram reached on August 13, 2009 – the highest since November 5, 2008.
Analysts say the recent price increase will be difficult to sustain until the end of August, as supply gradually increases, especially from Thailand.
For the physical rubber market, analysts forecast prices to remain close to July 2009 levels. Thailand’s RSS3 rubber will be at $1,88 per kg by the end of August, down slightly from $1,92 at the end of July. Malaysia’s SMR20 and Indonesia’s SIR20 will be steady at $1,81 per kg and $1,70 per kg, respectively.
The rubber market picture has brightened considerably after prices fell to a three-month low of 150 yen per kilogram in June 2009, following the trend of crude oil prices.
Currently, crude oil prices are at around 71 USD/barrel, which is considered reasonable for both producers and consumers. With this price, the market of other commodities is also supported to increase. Natural rubber is always affected by the trend of oil prices, because it competes directly with synthetic rubber - a product of petroleum.
The world economic outlook has many positive signs. The US employment rate is increasing; economic figures in China are very positive, especially car sales; the stock market is rising…. promising a rebound in demand for energy and other raw materials.
After a long period of heavy rains that hampered latex harvesting, supplies in Thailand, the world’s largest rubber producer, are increasing again. However, strong demand from China will prevent prices from falling below 180 yen per kg – the level they were at in late July 2009.
China's auto sales rose 77,7 percent in July from a year earlier, the biggest increase since January 2006, boosted by tax cuts and government subsidies to stimulate demand. China is a bright spot in the global auto market, leading the recovery. General Motors Co., the largest foreign automaker in China, and Nissan Motor Co. both plan to increase production capacity in the country. The outlook for the global auto market is very positive. China surpassed the United States to become the world's largest auto market this year.
Vietnam's rubber exports to China in the first 6 months of this year reached over 151 thousand tons, worth 215,65 million USD, down 2,18% in volume and 46,05% in value compared to the same period in 2008, due to the sluggish automobile market. However, exports have gradually recovered since July. The Chinese market accounts for about 65-70% of Vietnam's total rubber export volume. In the first 6 months of this year, exports of mixed rubber, RSS3, Latex, CSRL... maintained the same progress as the same period last year. In particular, exports of temporarily imported and re-exported rubber from Thailand, Indonesia and Malaysia increased sharply, increasing from 5 to 10 times compared to the first 6 months of 2009.
The rubber industry hopes that with the strong recovery trend of the Chinese auto market, exports in the last months of the year will be positive.
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