Rubber: Respect the Seasons, Prioritize Structure

2023-05-15

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◆ Our qualitative outlook for the 2024 rubber market is to respect the rhythms of nature while placing emphasis on structural factors.

◆ We expect the rubber market in 2024 to be characterized primarily by structural trends, with seasonal patterns serving as the underlying rhythm, complemented by event-driven dynamics.

◆ Rubber is an agricultural commodity, and its supply is heavily influenced by weather conditions. Demand for rubber also exhibits strong seasonality. Therefore, it is advisable to align production with the natural rhythms of the seasons.

◆ On the demand side, rubber demand is closely linked to the outlook for economic growth.

Global rubber demand is expected to remain neutral or decline slightly.

China’s rubber demand is expected to be flat or decline, driven by anticipated weaker demand in the post‑real estate cycle.

Overseas rubber demand is expected to remain subdued in the first half of the year, but may pick up in the second half as the Federal Reserve and the European Central Bank ease their monetary policies.

◆ On the supply side, we believe that, given the substantial production‑expansion potential in Vietnam and Côte d’Ivoire and their low tapping costs, supply is expected to grow by 0–2%. With significant upside in output, the supply outlook remains neutral or slightly tight.

◆ Rubber: In the first half of the year, it helped tire manufacturers boost profits and cut costs; in the second half, it aimed to secure a good harvest for rubber farmers.

◆ The main theme is financial services supporting the real economy.

◆ In the first, second, and third quarters, premiums were generally high—let’s cherish this opportunity, sell more at a premium, and preserve value. Approach the market with caution.

In the fourth quarter, low contango typically prevails, safeguarding rubber farmers’ harvests. Increased stockpiling helps the real economy build up inventories.

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Natural Rubber: Focus on Long‑Position Opportunities Amid Supply Dynamics and Macro‑Level Synergies

The production process of standard rubber, from tapping to finished product, and knowledge about natural rubber imports.

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Natural Rubber: Focus on Long‑Position Opportunities Amid Supply Dynamics and Macro‑Level Synergies

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The production process of standard rubber, from tapping to finished product, and knowledge about natural rubber imports.