Cost analysis: rubber bull market journey is long and long.

2023-09-13

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I have been focusing on this variety of rubber, because the supply of this variety is very rigid, once there is a big market, it will be particularly large. Moreover, it may not be far away from this big market. 10-20 years have passed since the previous round.

However, in the past few years, people who copy the bottom of the rubber are estimated to have died a large area. At this time, the price is very important, so it is necessary to explore the cost of rubber.

First, the cost structure of rubber.

The cost of natural rubber consists of three main components:

1. Rubber plantation cost

Including material costs, and the labor costs of tapping. The characteristic of planting is that the upfront investment belongs to the cost, whether you cut or not, the contract cost is always needed. Therefore, for plantations, if the price of rubber is lower than the labor cost and there is no profit, it will naturally not cut the rubber. If there is, it will naturally cut the rubber. Therefore, labor cost is a very important cost element.

2. Processing costs

Rubber is liquid, is relatively scattered, but also need to buy, in addition to processing into standardized products. This cost is a relatively fixed part with relatively low elasticity.

3. Other costs

Before rubber enters the exchange account, it also needs to be transported, as well as tariffs and so on. At present, the most favored nation import tax rate of ASEAN is 20%.

But this tax rate is changing, for example, this year it is 10%.

Rubber is a strategic material, so there are protection and subsidy policies for rubber in China. Although rubber is an international agricultural product, its price is a bit like white sugar, with high strategic value, large internal and external price difference, and complex fundamentals.