Report for NR end DEC 2019

Rubber prices this week are still experiencing an increase with an increase this week by 3%.

May rubber prices on TOCOM at Friday’s close rose 0.9 yen ($ 0.82 cents) to 198.9 yen per kg. Likewise, May rubber prices on the Shanghai Futures Exchange rose 115 yuan ($ 16.43) to 12,850 yuan per ton. TSR 20 rose 105 yuan to 10,720 yuan per ton.

Rubber prices have increased from the end of August to the present, but in December the increase has experienced saturation.

Factors for rising rubber prices this week:

Seasonal factors due to rising rubber prices always occur in the fourth quarter. This cycle is the cycle of the rubber plant so that there is a limitation of the delivery system. At the end of December the wiretapping was stopped at the rubber plantations so that the price of rubber increased due to reduced production.

The effects of the El Nino storm in mid-2019 caused the tapping time to be postponed, and caused a mushroom outbreak from Indonesia to southern Thailand, causing production to fall, resulting in price increases.

The decline in inventories was lower than expected, to the extent that a mushroom outbreak in the rubber plantation area of 382,000 ha in Indonesia had an effect on the production of 1,158 kg / ha and reduced production by 80%. The total output is 350,000-370,000 tons. As a result of the treatment cycle the production of 100,000 tons. Fungal damage in Thailand was 100,000 tons. The worst estimate of a mushroom outbreak of 400,000 tons compared to annual production of 14 million tons, only 3%, the small effect of output and the effect of inventory, cannot be a momentum that raises high prices quickly.

Purchases of heavy trucks are improving in China, although overall sales of motor vehicles are not good in 2019, except heavy trucks are showing an increase. In September 2019, heavy truck sales of 91,345 rose 14% in the same period, motor vehicles dropped.

Another very influential product is the increase in the price of crude oil because the synthetic rubber material is derived from crude oil. If the price of crude oil is expensive, the price of natural rubber increases because the demand for natural rubber increases to replace synthetic rubber.

This week the price of crude oil increased due to an agreement from OPEC to reduce its production.

The increase in rubber prices in the fourth quarter was the result of a combination of the four factors.


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