Natural rubber prices hit a new 5-year low

Natural rubber prices hit a new 5-year low

Recently, the price of domestic natural rubber (hereinafter referred to as natural rubber) hit a new 5-year low. Yesterday (September 16), in a conference call on natural rubber prices organized by a securities company, the brokerage analyst said that with natural rubber prices As the price of raw materials fell sharply, the company's performance will be significantly higher than expected this year.

The oversupply in the rubber market was affected by Thailand’s 210,000-tonne rubber reserve. Under the circumstances that there was a global oversupply, the prices of natural rubber have continued to decline in the recent period, and recently it has hit a new 5-year low. The last month's rubber 1501 contract fell to 13,285 yuan / ton, while the spot market's current lowest price remained at around 11,000 yuan / ton.

In spite of falling prices, the pattern of oversupply of rubber has not been changed. The time for release of rubber from a production capacity is generally about 7 years. Therefore, the rubber trees planted in 2010 will have to be cut before 2016 and 2017 at the earliest. . In the conference call, the above securities analysts believe that the global supply of rubber is in excess of demand, and stocks are increasing year by year. If the stocks of natural rubber continue to grow, there is no reason for the trend to reverse the trend. However, the analyst also believes that there may be a mid-range rebound in rubber prices in the short term.

The main reason is that, first, the cost of tapping rubber accounts for most of the cost of rubber production, such as 1 ton of rubber for selling 10,000 yuan, 40% of the income will be paid to tapping workers, and if the monthly income is lower than the local minimum wage, it will lead to the supply of natural rubber. The volume or operating rate dropped sharply. The price of natural rubber in the current spot market is already lower than the production cost in Hainan, which may be the support point for short-term prices. Second, China's rubber inventories have fallen rapidly, and the strength of rubber shorts has weakened. Third, China's main producing areas will enter the stop-cut period and there will be no supply. This will also lead to a rebound in rubber prices.

The analysts of the above securities firms believe that Hainan Rubber and Sinochem International, which are involved in processing and planting, will hopefully enjoy the investment opportunities brought about by the mid-level rebound in rubber prices.

Downstream companies are expected to benefit from the continuous decline in natural rubber prices. The use of natural rubber as a raw material for production of Sanlux and Saiwan shares will undoubtedly usher in a reduction in cost.

Sanlux is the largest drive belt manufacturer in China with the largest annual production capacity. In recent years, the company's V-belt production, sales, and sales revenue have been ranked first in the country. According to sources from the Sanix Securities Office, due to the company's relatively large amount of use, the decline in the price of rubber is good for the company. The rubber stock of the company is generally 6 to 9 months.

Some brokerage industry sources believe that Sanlux company's rubber inventory is sufficient to ensure the company's low-cost advantages in 2014; on the sales side, the company's products are highly competitive, in the domestic similar products, the price is slightly higher by 10%, but the service life is higher Nearly double the similar products, has a strong market pricing capabilities, to ensure the company's gross margin; in terms of orders, it is expected to be determined higher than the level of the previous two years, so in 2014 the company's performance increased significantly greater certainty.

In addition, the main business of Saiwan is the all-steel radial tire, semi-steel radial tire, etc. It will also benefit from the drop in raw material prices. “In the performance measurement of recent years, Sanlux and Saiwan were given a rubber cost of 15,000 to 16,000 yuan per ton, so even if the price of rubber does not fall in the short term, the performance of the two companies can still be guaranteed. It may be even lower. Therefore, with regard to the raw materials business alone, the two companies will have a higher probability of operating than expected.” During the conference call, the analyst said that the rubber mid-level rebound will not happen in the short term. The estimated time point From December to February of next year, Hainan Rubber and Sinochem International, which do not rule out rubber planting and processing, will be favored by the market in advance.

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