Market and product

Downstream of the second quarter of sustained economic risk of weak leading indicators indicate that the economy will stabilize in the second quarter; stabilization in credit growth, liquidity in the market bottomed out; leeway of central bank regulation, the macro trend of risk control. Although the macro level, the number of factors, but realistic plastic city consumption is still weak.

Natural rubber oversupply

Although the exposure of natural rubber supply and demand in the first quarter due to a reduction in supply and narrow, but still does not change the pattern of supply exceeding demand in the entire rubber industry, the rubber market currently does not have the possibility of a strong rise. With the advent of the open cut of the production growth is expected to be formed on the supply side an important negative factor for stabilizing the price of rubber as a whole still need to wait.

According to the data of the world’s natural rubber production country Association (ANRPC), natural rubber production in Thailand in April the year accounted for 5.35%, Indonesia 8.07% Malaysia 6.29%, 7.07% in China, total output of the Member States are expected to be 647,000 tons , up by 8.3 percent, the growth rate is impressive; is expected to gradually increase natural rubber production in April.

ANRPC recently released report shows ANRPC reduce supply since the end of 2011 to March 2012 between the estimated value, including the major producing countries, production and exports totaled 146,000 tons; expected consumption relative tune high of 12,000 tons. The main reason for yield reduction can be attributed to the Southeast Asian region is in the stop cutting period and poor weather conditions.

However, since April, northern Thailand rubber all open cut, northeast of open cut rates in 70% to 80%, 50% eastern southern Songkran Festival are starting to open cut Thailand’s rubber supply is gradually restored; Indonesia and Malaysia is relatively strong and growing period of the annual rubber supply; two major rubber producing areas in succession to open cut is expected to supply at the end will increase.

To the inventory process to speed up

Disadvantaged impact caused by the natural rubber supply and demand side is still high inventory, but the trend to the inventory in February better exposure to supply and demand is gradually reduced.

The first quarter of this year, the world’s natural rubber production is 2.567 million tons, contains the main producing countries in Southeast Asia and other countries; consumption was 2.664 million tons, including the world’s major consumer markets such as China, the United States, the European Union and other countries and regions to inventory 100,000 tons. The world’s synthetic rubber production capacity of 3.639 million tons, containing the main producing countries in Southeast Asia and other countries; consumption was 3.721 million tons, including the world’s major consumer markets such as China, the United States, the European Union and other countries and regions to inventory 82,000 tons.

Of ANRPC of 11 member production accounts for about 93 percent of the world’s natural rubber output. 1 March 2012, the ANRPC the total supply of 3.153 million tons, with imports of 924,000 tons and output of 2.229 million tons; total demand of 3.244 million tons, including 1.832 million tons of exports, consumption of 1.412 million tons. The first quarter of the total supply of 3.153 million tons of rubber were all digested to the inventory of 91,000 tons. ANRPC is expected in May 2012, is expected to amount to the inventory of 249,000 tons.

From a domestic perspective, to the inventory process is accelerating. The first quarter of Yunnan, Hainan and other production glue to mostly stop cutting period, 23,000 tons of production, imports of natural rubber was 645,000 tons; consumption was 730,000 tons, the export of 4000 tons; to the inventory of 66,000 tons. ANRPC expects China’s domestic production of 5.3 million tons in April, imports of 260,000 tons, 290,000 tons of consumption, resulting in excess supply of 23,000 tons in April; May, production increased to 70,000 tons, and imports dropped consumption increased from 320,000 tons to 185,000 tons, so that the gap between supply and demand of 65,000 tons.

Growth also look at the automotive market

Late natural rubber demand growth momentum is expected to gradually dependent on the recovery of overseas automotive market and the domestic truck industry.

The domestic auto market uncertainty, and the domestic passenger car market and the commercial vehicle market differentiation serious. Domestic passenger car sales in March increased by 4.54% and commercial vehicle sales fell 8.8 percent, while truck sales fell 10.3 percent, including heavy truck sales fell 33 percent cumulative decline in the first quarter was 30.1%, the tire rubber demand reduction of the most obvious.

But car sales accumulated down the speed slowing down. Passenger car sales in January, the cumulative year-on-year decrease of 23.81%, the cumulative year-on-year increase of 4.4 percent in February, the cumulative year-on-year decrease of 1.3 percent in March, a commercial vehicle sales in March, the cumulative decline of 37.27%, 12.33%, 10.85 % of truck sales in the cumulative decline of 38.6%, respectively, 13.2%, 12.0%, the bottom of the signs of fade.

However, according to data released by the National Bureau of Statistics, in the first three months of this year, China’s tire production totaled 1.9752 billion, an increase of 6.8%. The increase in demand for tires will directly stimulate the demand for rubber, support rubber prices.

Hovering near the present situation, the loss of tire companies accounting for 10 percent at historically low levels, the loss is not serious. Preliminary determination as a reduction of profits from the previous month, the enthusiasm for production not been a fundamental blow to the tire industry still has a certain potential for development.

Compared to the downturn of the domestic automobile market, other countries, the automotive industry are more optimistic about growth.

U.S. light vehicle sales year-on-year increase of 12.7 percent in March, an increase of 22.16%; Japanese new car registrations increased by 78.2%, an increase of 49.44%; India’s passenger car sales grew 19.7 percent, an increase of 8.73%; only less than ideal the European market, the EU-27 passenger car sales fell 7.0 percent.

Overall, the world’s rubber supply and automobile terminal production remained relatively balanced, the current round rubber prices decline by poor domestic rubber cut supply pressure and end car sales, the interference of the European debt crisis. With the improvement of terminal sales of motor vehicles the status quo, the decline of rubber prices continue to release the negative factors, is expected to round down to below 24,475 yuan to the formation of a rebound, limit position adjustment to 21,800 yuan, the current strategy for preserving and increasing short plate holds the rhythm of business-to-business purchasing recommendations put slowly, buying hedge against inflation and speculative bulls still have to wait.