Improved tire export prospects are favorable for the rubber market

The number of tires that China exports to the United States will increase, due to the expiration of the U.S.-China Tire Special Security Case. In addition, investors expect that China's trade relations with the European Union will continue to improve, which is conducive to rubber demand and increase futures prices.

The March crude oil contract on the New York Mercantile Exchange fell slightly. In February 2012, the confidence of analysts and investors in Germany increased more than expected, reaching the highest since April 2011. However, Moody's downgraded the credit ratings of Italy, Malta, Portugal, Slovakia, Slovenia and Spain, and the risk caused by the European debt crisis increased. The rating agency also warned that the highest ratings in Austria, France and the United Kingdom also face the risk of being lowered. In addition, the euro zone finance minister canceled the conference held in Brussels on a new round of aid for Greece and changed to a conference call. Greece did not clearly articulate ways to implement new fiscal austerity measures. The drop in crude oil will reduce the cost of synthetic rubber and will be detrimental to the natural rubber market.

Weather conditions, natural rubber producing areas in Thailand, clear and sunny in the north-central part of Thailand, clear in the south, Malaysian production areas, cloudy southern part of the Malay Peninsula, rain in the northern part of Kalimantan Island, Indonesian production area, northern Strait of Sumatra, cloudy to the north of the equator, and Sumatra to the equator The south is cloudy, the south of Kalimantan is cloudy; in China, Hainan is cloudy, and Yunnan is sunny. The current weather will not have a major impact on rubber production and transportation.

Asian Rubber Market, previous trading day, RSS3 (March/April) reported 400-405 cents/kg, STR20 (March/April) reported 380-383 cents/kg, SIR20 (March/April ) 374-376 cents/kg. On the 15th, Malaysia's standard rubber SMR20 March FOB official quotation rose slightly in the morning. The Shanghai Natural Rubber Futures May contract rose by 2.48% in the morning.

In other respects, according to the latest statistics released by the Association of Natural Rubber Producing Countries, in 2011, the total output of natural rubber of the members of the World Natural Rubber Producers Association reached 10.13 million tons, a year-on-year increase of 7%, which was higher than the previous 6% forecast. Among all member countries, Vietnam has the most significant increase in natural rubber production. In 2011, the total natural rubber production in Vietnam was 810 thousand tons. In 2010, the output of natural rubber in Vietnam was 750,000 tons, an increase of 8% year-on-year. Vietnam's natural rubber production shows a gradual increase. The rise in Vietnam’s output is not conducive to rubber prices.

In general, the commodity market has encountered difficulties. The Greek proposal was not accepted by the EU. Since the Greek party did not explicitly commit itself to implementing the EU resolution, the EU even gave up the meeting of finance ministers and held only one phone call. This shows that Greece is unlikely to get a loan smoothly. However, investors expect that China will relax monetary policy. The recent position of senior government officials seems to suggest that good measures will be favorable. The external situation has little pressure on the rubber market. Supported by Thailand's purchase and storage prices, the rubber spot market holds an important threshold of 400 cents. In addition, as the United States expires on China’s special security case, China’s tire exports will increase. China is also preparing to assist the European Stability Fund and is expected to improve China’s exports. Europe is China’s important tire export market. The expectation of a rebound in demand has raised the price of rubber futures.