1、 Market review in 2022

 

Futures:

 

Figure 1: Trend chart of main contracts of natural rubber futures in 2022

 

goods in stock:

 

Figure 2: Trend of natural rubber spot commodity index in 2022

 

Figure 3: Monthly K histogram of natural rubber market in 2022

 

According to the data monitoring of the Business News Agency, the natural rubber and natural rubber market in 2022 is worse than that in previous years, and the downward trend is obvious. As shown in Figure 1-2, the mainstream market trend of domestic standard 1 in East China is in the reverse “√” shape, and the annual overall downward trend is 10.9%. The natural rubber starts to fluctuate from 13748 yuan/ton at the beginning of the year, first breaks through the 14000 yuan/ton mark in a small upward direction, and reaches the annual peak price of 14020 yuan/ton on the 12th; Then it continued the downward trend of repeated shocks for 10 months, until the end of October fell to the annual low of 11170 yuan/ton, which was close to 11000 yuan/ton, and then the shocks rebounded up 4.94% from the beginning of November, reaching the stage rebound high of 12420 yuan/ton on December 9, and then retreated until 12250 yuan/ton on December 31. Overall, the maximum amplitude of domestic standard price of natural rubber in 2022 is 20.33%.

 

Factor analysis:

 

Macro:

 

Figure 4: Trend of international crude oil mainstream market from January to December 2022

 

As shown in the figure, in 2022, the oil price showed an inverted “V” trend, and the annual amplitude of WTI and Brent crude oil exceeded 80%. The oil market showed a strong trend at the beginning of the year, and the Brent oil price rose to the highest point of 139 US dollars/barrel in the whole year under the influence of geopolitical risk premium and consumer resilience. The strong trend continued until the end of the second quarter. In the second half of the year, due to the negative macro outlook, the economic recession depressed demand expectations, and the “peak season” of oil product consumption, the risk premium accelerated to fall. Near the end of the year, the oil price basically returned to the level before the war between Ukraine and Russia. The oil market seeks to rebalance between low supply and weak demand. As of December 27, the price of WTI crude oil was 79.53 US dollars per barrel, up 5.74% for the whole year; Brent crude oil price was 84.68 US dollars per barrel, up 8.87% for the whole year.

 

Industry:

 

Phase I: January to March

 

Figure 5: Market trend of natural rubber spot market from January to March 2022

 

In January-March, the domestic natural rubber (standard 1) in China’s East China market fell sharply: on January 1, the main price was about 13748 yuan/ton (on January 12, 14020 yuan/ton was the highest point of the year), and on March 31, the main price was about 13190 yuan/ton, a decline of 4.06% in three months.

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In January-March, for foreign production areas, the annual production reduction period will be entered first, and all domestic production areas in China have been cut off before the year; In addition, China’s social inventory has slowed down and accumulated, so from the supply side, the advantages of rubber supply in January are all obvious, and the stock preparation before the year pushed the demand price up, which led to the highest annual price of natural rubber; The holiday was opened before the Spring Festival, the demand was weak, and the price of rubber was suppressed. After the Spring Festival in February, the operating rate of downstream enterprises rose after the year, and the recovery rate slowed down near the end of the month. The enthusiasm for rubber procurement decreased, the market price acceptance was low, and the transaction was weak. In March, the production suspension period in Southeast Asia is about to pass, and a new round of rubber cutting period is coming. The opening of Yunnan production areas in China has gradually increased, the overall rubber production has increased significantly, and the overall supply pressure is expected to increase. In March 2022, many provinces and cities in China have experienced public health events, and the downstream product manufacturers’ commencement, procurement and logistics transportation have been affected. The demand is weak, and the natural rubber market is volatile and weak.

 

Phase II: April to June

 

Figure 5: Market trend of natural rubber spot market from April to June 2022

 

From April to June, the domestic natural rubber (standard 1) market in the East China market fluctuated first, then up and down: on April 1, the mainstream domestic market reported about 13110 yuan/ton, and on June 30, the market reported 12854 yuan/ton, a decline of 1.95% in three months; The highest price in this stage is about 13150 yuan/ton on April 6, and the lowest price is about 12100 yuan/ton on May 9. The maximum amplitude in this stage is 7.98%.

 

From April to June, the global economic growth rate is expected to be lowered, the domestic public health events continue to have a wide impact, it is difficult for rubber to leave the warehouse in Shanghai and other places, the circulation of raw materials and finished products in many places in China is blocked, the export demand decreases and it is difficult to recover in the short term; Heavy truck distribution and sales data show that all three major demands have weakened significantly; The slowdown in internal and external demand has led to the heavy inventory of finished products of tire enterprises, and the pressure of de-stocking is great, which has affected the commencement of enterprises. The import volume is low, and the domestic inventory is reduced by a small margin. The output of new rubber from Hainan is in serious shortage, so that the output of trans-regional transfer of goods to domestic and foreign production areas is gradually increasing, and the operation of processing plants is gradually recovering. This quarter is generally in the off-season of consumption in the middle of the year, and the market demand is relatively weak, and the speed of Tianjiao’s stock elimination is slow. The domestic and foreign supply side continued to increase. The domestic auto promotion policy boosted the natural rubber futures, and the production and sales chain rose. The natural rubber market continued to fluctuate. Among them, from the middle of May to the first ten days of June, the sharp rise of international crude oil led to the trend of the commodity market, and the natural rubber market rose by nearly 9% at this stage, followed by the first decline of crude oil in the middle and last ten days of June, and the natural rubber market adjusted with the market.

 

Phase III: July to October

 

Figure 6: Market trend of natural rubber spot market from July to October 2022

 

From July to October, the mainstream market of natural rubber (standard 1) showed a continuous downward trend of shock. Although there was a rebound during the period, it was difficult to stop the decline, so that it fell to the annual lowest point of 11170 yuan/ton at the end of October, and this price level was not only the lowest since the same period in October 2021, but also the lowest since the same period in 2020. On July 1, China’s East China market’s domestic standard 1 was about 12954 yuan/ton, and on October 31, the market’s main price was about 11170 yuan/ton, with a decline of 13.77%. The natural rubber market experienced the worst “golden nine silver ten”.

 

In fact, in July, the domestic spot price of natural rubber has gone out of the second lowest price of 11190 yuan/ton. For downstream product enterprises in the same month, the cost of rubber procurement decreased, and the order receiving and operating rates of some enterprises recovered. With the global supply reaching the peak, and the import of natural rubber rings in China rose sharply year on year, the port stock accumulated and the order delay continued, the supply pressure increased significantly, and the price of glue was weak; On the demand side, affected by the high temperature weather in the early stage of the stage, power and production were limited in many places, the operating rate was limited, the inventory of finished goods of spot tires remained high, the export and domestic sales were not objective, affecting the enthusiasm of enterprises to start work, and the overall outlook of the industry was general; With the fall of the high temperature in autumn in the later stage of the stage, the operating rate of downstream enterprises increased all the time, but customs data showed that China’s tire export was under pressure in the third quarter, the economic recession was expected, the overseas demand was weak, the multi-point distribution of public health events continued to have an impact on the industry, the market pessimism spread, and the downstream demand did not improve significantly, and the procurement demand in these four months was lower than that in previous years.

 

Phase IV: November to December

 

Figure 7: Market trend of natural rubber spot market from November to December, 2022

 

After the price of natural latex fell to the lowest point of 11170 yuan/ton in the year at the end of October, the spot price of natural latex fluctuated for one and a half months in November and December, and the last half of the month was dominated by volatility and correction. Among them, on November 1, the main price of domestic standard 1 in China’s East China market was 11530 yuan/ton, and on December 31, the main price was 12250 yuan/ton, up 6.24%; At this stage, the highest price is 12520 yuan/ton, the lowest price is 11530 yuan/ton, and the maximum amplitude is 8.59%.

 

From the perspective of industry, the cutting of domestic latex has been gradually stopped at the end of the year, and the expected positive effect of production reduction has gradually emerged. In addition, the price of domestic latex is relatively firm driven by the stock preparation before the year; However, the Southeast Asian production areas were still in the peak season of new rubber production before the New Year’s Day. Affected by the cut of domestic areas in China, the price of latex in Thailand and Vietnam increased by more than 1000 yuan compared with the previous month, and the export volume continued to increase. The social inventory accumulated rapidly, and the price shock corrected. From the perspective of demand, the downstream tire enterprises resumed operation after the end of the maintenance cycle. The operating rate of the tire enterprises was about 60%. The inventory pressure of the finished tire products was still high. The domestic and overseas demand was low, and the tire export continued to grow negative year on year for many months. The expectation of economic downturn and the nationwide immunization after the policy of public health events was released at the end of the year, the infection was rapid, and the production of enterprises was affected. In addition, with the arrival of New Year’s Day and Spring Festival holidays, some employees of many enterprises went to work or had holidays in advance, the order quantity of natural rubber dropped sharply, and the market situation gradually stabilized. On the other hand, after the policy liberalization, several provinces have taken the lead in seizing overseas orders. It is preliminarily expected that the cooperation at home and abroad will be promoted rapidly next year, and the overseas demand will be significantly improved.

 

2、 Market outlook in 2023

 

From the comparison chart of previous years, the natural rubber market in 2022 is lower than that in previous years. From the perspective of seasonality, the price of latex has been on the upward trend since last month due to the domestic cut off, the foreign normal production, the supply side reduction and the stock preparation before the Spring Festival. After the stock preparation before the holiday was basically completed, the national immunization policy was released, the number of people returning to work was limited due to infection, and the Spring Festival holiday was imminent, and the product manufacturers began to reduce. As for the aftermarket, the market is mainly flat in the short term. After the year, with Vietnam and Thailand reducing production or even cutting, the supply side is at the lowest level of the year. After the Spring Festival, downstream product factories resume production. The demand will start in the new year, and the market will continue to be strong.

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The domestic cobalt price fell in December

 

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According to the data monitoring of the Business News Agency, as of January 8, the domestic cobalt price was 319100 yuan/ton, down 1.33% from the cobalt price of 323400 yuan/ton on January 1. Both supply and demand in the cobalt market are weak, the international cobalt price is falling rapidly, the cobalt salt price is weak, and the domestic cobalt price is fluctuating.

 

Cobalt market supply

 

Affected by the previous South African port strike, the arrival data of cobalt raw materials in November decreased and the import volume decreased. It is reported that China will implement zero tariff on the import of some cobalt products (unwrought cobalt) in 2023. The import window of cobalt resources will be enlarged in the future, and the import volume of domestic cobalt market will increase in the future. In general, the supply of cobalt market is weak in the near future and is expected to increase in the future.

 

Cobalt market demand

 

3C’s performance update in the electronic field has slowed down, consumers’ enthusiasm for changing machines has weakened, and mobile phone shipments have continued to decline. According to IDC’s report, China’s mobile phone market shipments are expected to decline by 0.9% year-on-year in 2023, and the demand for electronic cobalt will decline. The epidemic prevention policy has been relaxed, the national consumption level is in the recovery stage, the aviation consumption has not been significantly improved, and the demand for cobalt for alloy is still low. The rush loading period of the new energy automobile industry chain ended in the fourth quarter, and the first quarter was the traditional off-season. Some battery plants entered the production reduction plan, the export volume of precursor and positive electrode materials fell, and the demand for cobalt in the new energy automobile market weakened in the first quarter.

 

Overview and prospect

 

Bai Jiaxin, data analyst of the Business News Agency, believes that the supply and demand of cobalt market remain weak after the holiday, the international cobalt price has dropped sharply, the cobalt salt price has not stabilized, and the cobalt price has not been supported by the rise of cobalt price. It is expected that the cobalt price will fall in the future.

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1、 Price trend

 

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It can be seen from the above figure that the domestic isobutyraldehyde market price rose slightly this week. The average price of domestic isobutyraldehyde in the mainstream market rose from 6466.67 yuan/ton at the end of last week to 6733.33 yuan/ton at the end of this week, up 4.12%. Compared with the same period last year, it fell 51.56% year-on-year. The isobutyraldehyde commodity index on January 8 was 34.18, which was the same as yesterday, down 67.63% from the cycle’s highest point of 105.58 (2021-09-16), and up 13.48% from the lowest point of 30.12 on October 7, 2022. (Note: the period refers to the period from September 1, 2021 to now)

 

2、 Market analysis

 

This week, the prices of mainstream isobutyraldehyde manufacturers rose

 

From the perspective of the upstream and downstream industrial chain, the propylene market in the upstream raw material market of isobutyraldehyde rose slightly this week, with the price rising from 7244.60 yuan/ton at the end of last week to 7250.60 yuan/ton at the end of this week, up 0.08%. The market price of upstream raw materials rose slightly, and the cost support increased. Affected by the supply and demand side, it had a positive impact on the price of isobutyraldehyde. From the perspective of the downstream industry chain, the market price of neopentyl glycol is low, and the price is 9133.33 yuan/ton. The market price of neopentyl glycol is low, and the downstream demand is general, which has a negative impact on isobutyraldehyde.

 

3、 Future prospects

 

The market trend of isobutyraldehyde in the middle and late January may fall slightly. The upstream propylene market rose slightly, with general cost support. The market price of neopentyl glycol in the downstream market was low, and the enthusiasm of downstream procurement was general. The isobutyraldehyde analyst of the Business Club believes that the short-term isobutyraldehyde market may suffer from small fluctuations and falls under the influence of supply and demand, raw materials and other factors.

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This week (12.30-1.6), the bottom of cis-1,4-polybutadiene rubber market was consolidated. According to the monitoring of the business community, as of January 6, the price of cis-1,4-polybutadiene rubber in China was 10560 yuan/ton, a slight drop of 0.19% compared with 10580 yuan/ton last Friday. On the one hand, the sharp rise in raw material prices has brought upward pressure on the cost of cis-1,4-polybutadiene rubber; on the other hand, the supply of cis-1,4-polybutadiene rubber continues to be loose. In addition, the downstream construction started to increase slightly at the end of December. Within the week, cis-1,4-polybutadiene rubber suppliers will first reduce the factory price of cis-1,4-polybutadiene rubber and then increase it. According to the monitoring of the business community, as of January 6, Sinopec North China Sales Company reported the ex factory price of butadiene rubber at 10100 yuan/ton. The market is cautious and optimistic about the future market, and the market trading price has hit the bottom in a short term. As of the 6th day, the mainstream market of butadiene rubber in Qilu, Yanshan, Yangzi, Dushanzi, Sichuan and other regions had reported 10300~10800 yuan/ton, and the mainstream market of private butadiene rubber had reported 10150~10250 yuan/ton.

 

The price of raw butadiene rose sharply this week (12.30-1.6), and the cost of cis polybutadiene rubber rose sharply. According to the monitoring of the business community, as of January 6, the price of butadiene was 7785 yuan/ton, up 7.51% from 7241 yuan/ton last Friday.

 

The natural rubber market rose slightly this week (12.30-1.6), supporting cis polybutadiene rubber. According to the monitoring of the business community, as of January 6, the price of natural rubber was 12410 yuan/ton, up 1.31% from 12250 yuan/ton last Friday.

 

Since the end of December, with the return of employees from all over the country to the downstream tire enterprises, the commencement of work has increased slightly, and the stock of cis-1,4-polybutadiene rubber has been supplemented slightly, and the market turnover has recovered slightly.

 

Future market forecast: according to the analysts of the business community, the supply pressure of cis-1,4-polybutadiene rubber is still present at present, but the downstream construction has increased slightly. In addition, the cost has risen significantly, and the price of cis-1,4-polybutadiene rubber is at the bottom. It is expected that the price of cis-1,4-polybutadiene rubber will rise slightly with the rising cost and demand growth in the later period.

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In 2022, the market price of nitrile rubber will decline significantly. As of December 31, the price of nitrile rubber will be 15100 yuan/ton, down 37.34% from 24100 yuan/ton at the beginning of the year. Specifically, the market trend of nitrile rubber in 2022 mainly presents three stages: first, the price of raw butadiene rises sharply from the beginning of the year to the end of April, but in the later period, COVID-19 disperses in many places, and it is difficult to improve the control of downstream construction. Under the comprehensive influence, nitrile rubber fluctuates in a narrow range, with the low point of 23700 yuan/ton in the cycle, the high point of 24550 yuan/ton, and the amplitude of 3.59%. 2、 Under the impact of new capacity and weak demand, it began to decline sharply in May, from 24550 yuan/ton to 15762 yuan/ton on August 11, a decline of 35.79%. 3、 After the impact of new production capacity in the third and fourth quarters, nitrile rubber was close to the new balance point of supply and demand. In addition, the demand did not improve significantly. From the middle to late August to December 21, the nitrile rubber market showed a slight fluctuation at the bottom of the stage. The low point in the cycle was 15000 yuan/ton, the high point was 17000 yuan/ton, and the amplitude was 13.33%.

 

Supply side: The pressure on the supply side of nitrile rubber will increase in 2022, which will drag down the price of nitrile rubber. According to the business community, Lanzhou Petrochemical will add 35000 t/a capacity on the basis of the original 65000 t/a capacity in 2022. In the middle of May 2022, qualified products will be produced after the new plant is formally put into production. Later, as the products with new capacity are put on the market, they will have an impact on the domestic nitrile rubber market. In addition, in the middle and high temperature of the year, the downstream construction of power rationing will be low, and the price of nitrile rubber will go down all the way.

 

Demand side: The global economy will slow down in 2022, the overall demand for nitrile rubber will be weak, and the support for nitrile rubber will be weak, which will drag down the price of nitrile rubber. According to the statistics of China Rubber Association, from January to October 2022, the inventory of most professional finished products showed a growth trend, including tire growth of 13.73%, bicycle tire growth of 9.05%, rubber hose and tape growth of 10.99%, rubber products growth of 10.59%, and rubber shoes growth of 26.29%.

 

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On the cost side: In 2022, the raw material butadiene market will first rise sharply and then fall in shock, and the price will generally rise in the whole year; Raw material acrylonitrile market fluctuated and fell. It can be seen from the price trend comparison chart of the business community that the consistency of 2022 raw materials and nitrile rubber market trend is relatively low, and the cost has no obvious impact on nitrile rubber market.

 

Future market forecast:

 

Butadiene analysts from the business community believe that there will still be pressure on the supply side of nitrile rubber in 2023. On the one hand, after the completion of the new Langshengtai Rubber Plant, the production capacity of nitrile rubber will increase from 30000 tons to 40000 tons. In addition, Jinpuyingsa still has a production capacity of 30000 tons, which will depend on the market situation.

 

Demand side: It is understood that the International Monetary Fund (IMF) believes that the global economic growth will slow to 2.7% in 2023. It is estimated that about one-third of the world’s economies will shrink in 2023. It is estimated that the global demand for nitrile rubber will still face pressure in 2023.

 

In general, the market of nitrile rubber will hardly improve in 2023. Affected by the light and busy seasons, the price will rise in the first half of the year and fall again in the second half of the year. The price will fluctuate between 14000 yuan/ton and 20000 yuan/ton.

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