Last week, the price of rubber futures fell from 13000 yuan to 12735 yuan / ton at the end of the week, which ushered in the low point of 2021. According to yesterday's rubber market, the lowest price of rubber has reached 12560 yuan / ton.

High tire inventory pressure

Since June, the natural rubber market has continued its downward trend in May, mainly due to weak downstream demand. Although the end of environmental protection and the improvement of tire production in Shandong Province, due to the pressure of inventory and sales, high temperature power rationing in summer and wheat harvest in northern China, tire production will gradually transition to off-season. At present, the operating rate of tire factories is relatively low, which is maintained at more than 60%. The weakening of demand expectation depresses the confidence of rubber market operators. In addition, due to the current shortage of containers and high sea freight, the number of tire export orders has decreased. The profit compression of tire enterprises, in order to alleviate the pressure of inventory, more control of production scheduling, and negative purchase intention of rubber raw materials are also the main reasons for the poor downstream demand of rubber.

China's heavy truck sales reach a dead end

Since the fourth quarter of 2016, China's heavy truck market has been the core driving factor for the growth of natural rubber terminal consumption. However, there are various signs that the heavy truck cycle may have come to an end.

The latest statistics show that in May 2021, the national heavy truck market is estimated to sell 158000 vehicles of various types (invoice caliber), a year-on-year decrease of 21000 vehicles or 12%, and a month on month decrease of 18%. In the first five months of this year, the sales volume of heavy truck industry totaled 883000 vehicles, an increase of 37% over the same period of last year, but the cumulative growth rate further narrowed.

In June, the production and sales situation of heavy truck market was not optimistic, and the probability continued to decline year-on-year, which made the traction power of natural rubber demand side insufficient. The cycle of China's heavy truck industry has just gone through a super long period of sustained high-speed growth, but at present, the biggest growth point of rubber tire demand, its marginal growth has reached the inflection point of stop up and go down.

Recently, the weather of rubber producing countries is relatively stable, and a large number of raw materials are exported. With the full opening of the main production areas in Southeast Asia, the natural rubber market will face the pressure of supply again. If the growth rate of domestic demand slows down or even regresses at this time, the rubber fundamentals will undoubtedly deteriorate, and the rubber price will reach the bottom again.