Concentrated Latex Keeps Rising in the "Golden Sep and Silver Oct" Peak Season

Concentrated Latex Keeps Rising in the "Golden Sep and Silver Oct" Peak Season

The concentrated latex, which had been silent for a long time, finally received rising news during the peak season of "Golden Sep and Silver Oct". The quotation for ordinary bulk imports from Thailand in the Zhejiang market has increased from 9050 yuan/ton in mid August to 10200 yuan/ton in early September. The upward trend of spot prices has maintained for nearly a month, and during this period, the quotation has increased by 1150 yuan/ton, an increase of 12.83%. After the first wave of increase in early September, concentrated latex remained relatively high and strong. After the end of the National Day holiday, concentrated latex experienced a wave of increase again . Since early October, the price of imported ordinary bulk from Thailand in the Zhejiang market has remained around 9950-10050 yuan/ton. As of mid October, the price of concentrated latex has risen to 10600 yuan/ton, an increase of 5.66%.

For the rise of concentrated latex, it is not difficult to see that these two significant increases are closely related to futures. This year, the market quotation of concentrated latex has continuously strengthened its compatibility with the overall futures market, especially in the case of a significant increase in futures, where the trend of concentrated latex quotation following the rise is prominent. But this is only driven by the overall trend of the environment, and the broad increase in concentrated latex prices has also stimulated market participants to reflect on the supply and demand side of concentrated latex this year.

Cost side: frequent rainfall, reduced supply, and significant cost support

After entering September and October, it has also entered the seasonal peak season of global natural rubber production. Following the normal production rhythm, the supply side is expected to strengthen, and the support for raw material prices is relatively weak. However, frequent rainfall and weather disturbances in domestic and foreign production areas have affected the normal operation of rubber cutting operations, and raw material prices have also begun to show a significant upward trend, with cost support gradually strengthening. Moreover, downstream demand is relatively stable this year, and the impact of supply side speculation will be more proactive. After the end of October, domestic production areas are about to see the end of rubber cutting and production reduction, and the supply side support will basically remain in the main position. So from the cost side, the hype on the supply side will not decrease, and the bottom support will also be relatively obvious.

On the demand side: Early stocking shorten lead time, and procurement leaning towards short-term using commodity

From the overall situation of demand for concentrated latex this year, there is no particularly significant growth point, and it has basically maintained a relatively stable operating rate, with no change in long-term operating rates. The relatively stable demand has also changed the cyclical changes in downstream procurement to some extent. According to the significant changes in peak and off-season in previous years, downstream procurement will purchase long-cycle goods in advance based on their actual situation. However, this year's overall demand is relatively stable, which has led to downstream procurement leaning towards short-term use and purchase as needed. However, as the concentrated latex market begins to rise, and downstream use and purchase as needed, a small amount of replenishment actually provides support to the concentrated latex market to some extent.

From the perspective of this year's "Golden Sep and Silver Oct" situation, it is not the actual peak season that stimulates the rise of concentrated latex. More importantly, stable demand support, frequent supply side speculation, and the coordination of supply and demand driven by the overall environment have brought about the peak season of price increase for concentrated latex.Issues will gradually emerge at the end of supply in November and December, as well as early procurement and replenishment during the Spring Festival period, which will also ensure that there is relatively limited room for a significant decline in concentrated latex prices.