Bring a strong margin of safety synthetic rubber prices for natural rubber.

Bring a strong margin of safety synthetic rubber prices for natural rubber.

Affected by rising crude oil prices led to oil products and the change of production process, the main raw material of synthetic rubber butadiene synthetic rubber prices rose sharply driven by the rapid rise in prices. Synthetic rubber and natural rubber has a certain role in the field of downstream tire replacement. Due to the relatively low cost of synthetic rubber, the history of synthetic rubber prices basically under the price of natural rubber. This round of rapid synthetic rubber rose sharply appeared upside down will greatly enhance the natural rubber prices uncertainty, improve the natural rubber safety margin upward.

The association of natural rubber producing countries (ANRPC) said on Friday, due to the flood affected Thailand tapping activities in the first quarter of 2017, the global natural rubber production is likely to decline, the first quarter of the natural rubber production is expected to 0.8% yoy to 2 million 440 thousand tons. The association said in a statement, the 2017 members of the ANRPC annual output is expected to rise by 4% to 11 million 200 thousand tons, the previous three years yields were low. Members of the association of rubber production accounted for 92% of the world’s total output.

Thailand flood for the specific yield to wait until after the show stop cutting, for short-term supply to wait until after the Spring Festival in order to prove or disprove. The flood is more from the promotion of market supply and demand tightening expected point boost natural rubber prices. Rita futures, HuJiao 1705 contract on short-term pressure of 22000 yuan / ton, in the 19600 yuan / ton -22000 yuan / ton range trading.