This week's upward price raid reflects the simultaneous weakness of latex and natural rubber supply and demand. What is the main cause? Again, weather problems affecting supply. Two typhoons impacted supply from Vietnam and China which, although they are minor producers, end up adding difficulties to a production that, in general terms, is still low for this time of the year.
Typhoons seriously affect production in Vietnam and China.
As in the last weeks, the bad weather situation keeps prices very high. In addition to the situation in Thailand (the weather service has again warned of heavy rains from September 13 to 15), there has been the effect of typhoons Yagi and Mojie. The former severely disrupted Vietnam's rubber supply. Although Vietnam is a second-tier producer, in the current context the impact is enough to significantly aggravate shortages in one market. In China, Typhoon Mojie destroyed between 200,000 and 300,000 rubber trees in Hainan, with an impact of about 5,000 tons per day for 5 to 7 days.
Consumption continues to stagnate in China and the real estate sector is not recovering.
Consumption in China continues to stagnate, which is evidenced by the increase of only 0.5% in imports. With respect to the automotive industry, which is the main demander of natural rubber, sales have stagnated since March and in year-on-year terms fell by 5% in August. In response, Honda has temporarily slowed production. On the other hand, the real estate sector continues to be in crisis, with a 27% year-on-year drop in sales. The government is providing incentives to refinance mortgages, but is unable to change the trend. The only positive news, on the other hand, has been the 8.7% growth in exports, above expectations.
China releases natural rubber inventories?