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Shanghai rubber market stays on the sidelines during South Korean military exercises

  • Categories:Industry News
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  • Time of issue:2020-06-18
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(Summary description)Shanghai Natural Rubber Futures May contract fell 0.36% in early trading on the 23rd. The possibility of raising interest rates in the short to medium term in China is greatly reduced, and Asian spot prices have risen one after another, which has stimulated domestic rubber futures. However, investors are concerned about the reaction of the State Reserve and the results of South Korean military exercises.

Shanghai rubber market stays on the sidelines during South Korean military exercises

(Summary description)Shanghai Natural Rubber Futures May contract fell 0.36% in early trading on the 23rd. The possibility of raising interest rates in the short to medium term in China is greatly reduced, and Asian spot prices have risen one after another, which has stimulated domestic rubber futures. However, investors are concerned about the reaction of the State Reserve and the results of South Korean military exercises.

  • Categories:Industry News
  • Author:
  • Origin:
  • Time of issue:2020-06-18
  • Views:0
Information

Shanghai Natural Rubber Futures May contract fell 0.36% in early trading on the 23rd. The possibility of raising interest rates in the short to medium term in China is greatly reduced, and Asian spot prices have risen one after another, which has stimulated domestic rubber futures. However, investors are concerned about the reaction of the State Reserve and the results of South Korean military exercises.

On the 22nd, the New York Mercantile Exchange (NYMEX) February crude oil futures closed up 0.66 US dollars or 0.73% to 90.48 US dollars per barrel. The U.S. Department of Energy said that crude oil inventories in the United States decreased by 5.33 million barrels in the week of December 17, which was the third consecutive week of reduction. Gasoline inventories increased by 2.4 million barrels a week and distillate stocks decreased by 589,000 barrels. The overall decline was slightly greater than expected. The severe cold weather in Europe triggered strong demand for heating oil, and the forecast said that next week the average temperature in the northeastern United States will be below normal for most of the time, indirectly supporting the rise in crude oil. The National Real Estate Association announced that rising sales of existing homes in November eased concerns in the real estate market. Rising crude oil will increase the cost of synthetic rubber, which will benefit natural rubber prices.

Weather conditions, Thailand's natural rubber production area, cloudy in central and northern Thailand, cloudy in the south; Malaysia production area, heavy rain in the southern Malay Peninsula, heavy rain in northern Kalimantan, rain affects local tapping production; Indonesia production area, Sumatra Cloudy in the north, heavy rain south of the equator of Sumatra, and cloudy in the south of Kalimantan; China's production area is cloudy in Hainan and clear weather in Yunnan.

Asian spot market, the price rose on the previous trading day. A person in charge of the transaction said that inquiries were active on the day, and many new buyers in India, Sri Lanka and the Middle East asked for inquiries. The person in charge believes that some of them may be local wholesalers, and the supply is still tight. Thailand's No. 3 cigarette rubber RSS3, which was shipped in January, was sold at US$4,940 per ton. On a FOB basis, the buyer was a Japanese automaker. On the 23rd, the Malaysian standard rubber SMR20 FOB official price rose slightly in the morning.

In other respects, the central bank has suspended the issuance of 3-year central bank bills in the past two weeks. This week, the central bank once again suspended the issuance of central bank notes of this period, issuing only one billion yuan of three-month central bank notes. This suspension shows that the direction of monetary policy has gradually become clear during the year and around the Spring Festival, and it is stable rather than tight. The market has realized that when the CPI reaches 5.1%, the central bank did not raise interest rates, and the CPI is likely to gradually decline in the coming year, and interest rate hikes will be more cautious. This provides a loose monetary policy environment for the commodity market, and some futures prices have rebounded to the highest point of the year.

In general, the operation of the capital market has stabilized, even though South Korea is holding military exercises. Under the urging and warning of major powers, the tensions between North and South Korea have converged, and the capital market has once again realized that the so-called tensions are always temporary. In Europe, although US rating agencies have successively warned or set about downgrading sovereign debt ratings, the risks are clearly within the control of the EU, at least in the short-term

This is indeed the case in the period of   . The suspension of the 3-year central bank bill by the People's Bank of China shows confidence in raising reserves to curb liquidity. Not only is it impossible to raise interest rates during the year, but it is unlikely to raise interest rates in the first quarter of next year. This loose macro environment is beneficial to the rubber market. There are reports that India's production may fall by 4% in the fourth quarter, further stimulating spot prices. In the rubber producing area of ​​Malaysia, heavy rain continues, and the country's output is not optimistic. Although the profits of Chinese tire companies are meager, waiting does not seem to be a good choice. Buyers pouring into the Asian spot market have not only come from developed countries, but also traders in backward areas. However, the short-term market still needs to wait for the statement of the State Reserve of China.

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