A huge number of registered warehouse receipts have become an upward resistance to the price of natural rubber

The amount of natural rubber registered receipts in the previous period has reached 423,800 tons, compared with 399,400 tons in the same period of 2018
.
In the case that the dematerialization rate of natural rubber inventory is not significant, the settlement price of Shanghai rubber 1905 contract will be 13,000 yuan / ton at the time of delivery, and even the probability of receiving 12,500 yuan / ton will not be very high
.

In February, the main 1905 contract of Shanghai rubber successfully exceeded 12,000 yuan / ton, closing up 10.
33%, the largest monthly increase since August 2017
.
Just a 10% monthly increase can become a record for nearly a year and a half, and it is not difficult to see how long
the market for natural rubber has been sluggish.
However, unfortunately, after the Shanghai rubber 1905 contract failed to hit 13,000 yuan / ton in early March, it quickly fell back below 12,500 yuan / ton
.
As of March 13, the Shanghai rubber 1905 contract closed at 12,005 yuan / ton
.
In the author's opinion, the settlement price of the Shanghai rubber 1905 contract will be 13,000 yuan / ton at the time of delivery, and even the probability of receiving 12,500 yuan / ton will not be very high
.

At present, the global natural rubber market supply is still in a
period of rapid growth.
According to the data released by the Association of Natural Rubber Producing Countries (ANRPC), in 2018, the production of natural rubber in Thailand, Indonesia, Vietnam, Malaysia and India, the five major natural rubber producing countries in Southeast Asia, increased and decreased, showing a substantial growth trend
overall.
In 2018, Thailand's natural rubber production was 4.
85 million tons, an increase of 420,000 tons year-on-year; Indonesia's natural rubber production was 3.
77 million tons, an increase of 140,000 tons year-on-year; Vietnam's natural rubber production was 1.
1 million tons, basically unchanged year-on-year; Malaysia's natural rubber production was 600,000 tons, down 140,000 tons year-on-year; India's natural rubber production was 650,000 tons, down 60,000 tons
year-on-year.
The five major natural rubber producing countries in Southeast Asia increased their total production of natural rubber by nearly 360,000 tons in 2018, and global natural rubber production continued to increase by more than
400,000 tons in 2018 after a sharp increase of 1 million tons in 2017.
In the absence of special natural disasters, it is expected that the main natural rubber producing countries in Southeast Asia will still have the potential
to increase production by more than 500,000 tons in 2019.

At the same time, the downstream demand for natural rubber is facing growth challenges
.
According to data released by the China Association of Automobile Manufacturers, in February 2019, China's automobile production and sales reached 1.
41 million units and 1.
482 million units, respectively, down 40.
4% and 37.
4% from the previous month, and down 17.
4% and 13.
8%
from the same period last year.
Taking into account the Spring Festival holiday, China's automobile production and sales in January-February 2019 reached 3.
776 million units and 3.
852 million units, respectively, down 14.
1% and 14.
9% compared with the same period in 2018
.
From January to February 2018, China's automobile production and sales data decreased by 2.
8% and increased by 1.
7%
year-on-year, respectively.
It is not difficult to see that after more than a decade of rapid expansion in China's auto market, the demand situation will usher in quite severe challenges
in 2019.

It is worth noting that the huge number of registered warehouse receipts will be a non-negligible resistance
to the price of natural rubber to get rid of the low price.
As of March 12, 2019, the number of registered warehouse receipts for natural rubber on the Shanghai Futures Exchange has reached 423,800 tons, compared with 399,400 tons in the same period in 2018
.
According to statistics, since 2015, when the amount of registered warehouse receipts exceeds 400,000 tons for delivery, the delivery settlement price of Shanghai rubber delivery contracts is below
11,500 yuan / ton.
From this point of view, the Shanghai rubber 1905 contract has a high probability of falling below the 12,000 yuan / ton mark before the last trading day
.

In summary, under the condition that the dematerialization rate of natural rubber inventory is not significant, the price of Shanghai rubber still has a long
way to go to get rid of the low value range.