Thailand's auto industry cuts production confidence in rubber market

Shanghai natural rubber futures January contract fell 3.65% in the morning on the 21st. The market is concerned that the French rating will be lowered and the rebound will be weakened. Affected by the sharp decline in the production of Japanese cars in Thailand, the pressure in the automotive industry began to be transmitted to the rubber raw material market. The spot price fell continuously, and the downtrend of futures is hard to change.

On December 20, the December crude oil contract of the New York Mercantile Exchange closed at US$86.07, down 0.22 US dollars or 0.25%. The Greek parliament passed a new austerity measure, and the Greek government must take these measures in exchange for a new round of bailout funds provided by international lending institutions. French President Nicolas Sarkozy and German Chancellor Angela Merkel expressed their desire to allow European Union leaders to approve a comprehensive plan to deal with the sovereign debt crisis in the euro zone at the latest by next Wednesday, and market confidence is supported. The number of jobless claims for the first time in the United States dropped slightly last week, indicating that the employment market has improved slightly. However, the situation is still sluggish, and the US’s existing home sales declined slightly in September, indicating that the US housing market remains weak and the crude oil market is under pressure. The steady crude oil will not affect the cost of synthetic rubber, and the pressure on the natural rubber market will weaken.

Weather conditions, natural rubber-producing areas in Thailand, cloudy northern and central Thailand, rain in the south; Malaysian areas, rain in the southern part of the Malay Peninsula, rain in the north of Kalimantan; Indonesian areas, heavy rains north of the equator in Sumatra, Sumatra There is rain south of the island's equator, rain in southern Kalimantan, and in China, Hainan is cloudy, and Yunnan is cloudy. The recent weather in Thailand has affected the tapping production and transportation.

Asian spot market, the previous trading day, prices fell sharply. A large Thai exporter said that it is difficult to reach a deal if the offer price is too low. A distributor in Singapore stated that prices have fallen too much and that Indonesian producers are reluctant to provide quotations. Most of the sales are from dealers and they expect prices to weaken. In November/December, Thailand's No. 3 smoke tablet adhesive RSS3 reported 400 cents per kilogram. On the 21st, Malaysia's standard rubber SMR20 November FOB official offer fell sharply in the morning.

In other respects, industry sources in the Japanese automotive industry revealed that as a result of the recent large-scale flooding in Thailand, Japanese automakers have shut down their Thai factories, reducing production by approximately 6,000 vehicles a day. The floods in Thailand and the natural disasters such as the earthquake and tsunami that occurred in Japan have caused the destruction of the supply chain and caused a serious negative impact on the Japanese car companies. A local Thai official said that the affected automaker may not resume normal production until mid-December. Once again, the Japanese auto industry has suffered setbacks that will affect demand for rubber and are very unfavorable to prices.

In general, the commodity market has not changed its downward trend. The EU summit will be held on the weekend. The market expects that Germany and France will make greater progress on the European debt issue, but this expectation has been diluted with the gradual disclosure of some details. Affected by negative observations, France’s sovereign rating added that the market is worried that France should do its best to protect its financial position rather than rescue Greece. It was reported that Wall Street investment bank Morgan Stanley had a short sale. After China explicitly tightened its policy, the market failed to find any solid support. The external situation is unfavorable to the rubber market. The boost effect of the production cuts no longer exists, and the flood in Thailand not only affected some of the supply and demand, but also affected the production of Japanese auto companies. The shutdown will last for several months and the daily output will be nearly 6,000. Demand in the Chinese auto market is cooling, and the market expects negative growth in the fourth quarter. The fear of falling demand is far more than the reduction in output, and it does not seem like a time to purchase a rubber contract.