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In this global analysis, we will delve into rubber production, the impact of Chinese demand, how vehicle sales are affected, and advice from maritime transporters.
Production Recovery:
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Despite recent rains complicating product evacuation last week, Thailand's rubber production is steadily advancing.
This is compounded by weak demand in China. Rubber imports to China remain sluggish, totaling 611,000 tonnes less in the first five months of the year compared to the same period in 2023.
The low import levels stem from two main reasons:
- China's economy, while growing, is slowing due to reduced consumption and the real estate sector crisis.
- There's also an inventory situation. Stocks were high earlier this year, leading to deferred purchases.
However, warehouse inventories in Qingdao reportedly dropped by 28% since the beginning of the year, suggesting a potential slowdown in purchasing declines heading into the second half.
Vehicle Sales in China Still Rising, but Slower:
Vehicle sales in China grew by 1.5% year-on-year in May, driven by electric vehicles, reaching a total of 2.42 million units.
Nevertheless, this marks a slowdown compared to previous months, with cumulative growth of 8.3% in the first five months of the year.
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