China reduces buying, rubber exports slow down
Because 70% of rubber is exported to the Chinese market, fluctuations in this market often greatly affect the overall export of our country’s rubber industry.
Meanwhile, China’s rubber consumption has slowed significantly recently as the country’s auto industry faces the dual effects of a semiconductor chip shortage and a power supply crisis.
According to data from the General Administration of Customs of China, the country’s natural and synthetic rubber imports in the third quarter of this year only reached 1.7 million tons, down 25% compared to the third quarter of 2020.
From January to September, China imported nearly 5 million tons of rubber, down 7.6% from 5.4 million tons in the same period last year.
According to data from the National Bureau of Statistics of China, the output of rubber tires produced in the country in September decreased by 14.5% year on year and reached 68.7 million units.
The production situation of China’s tire industry in October showed signs of improvement, but overall the operating rate was still low compared to the same period last year. This may cause Vietnam’s rubber exports to this market to continue to slow down in the fourth quarter of this year.
As of October 22, in Shandong – China, the operating capacity of tire companies was 60.5% with all-steel tires, 2 percentage points higher than the previous week but 14.8 points lower. percentage points over the same period last year.
The operating ratio of semi-steel tire factories was 56%, up 1.3 percentage points from last week but down 14.9 percentage points from the same period last year.
According to data from the General Department of Vietnam Customs, in the third quarter of this year, Vietnam’s rubber export volume to most of the main markets such as India, Korea, the US, Germany… all increased sharply over the same period last year. Last year, however, the volume of rubber exported to China alone decreased by 21.1% (corresponding to a decrease of 109,709 tons) to 410,949 tons.
Therefore, the total volume of rubber exports of the country in the third quarter decreased by 8.9% over the same period last year, reaching 574,760 tons.
Along with that, the average export price of rubber also decreased by 3.9% compared to the second quarter, to USD 1,650/ton.
But because the price level is still higher than the same period last year, export turnover still increased by 20.9%, reaching 948.4 million USD.
Besides, thanks to the high growth rate achieved in the first half of the year, rubber exports after the first nine months of the year increased by 15.8% in volume and 51.2% in value over the same period last year, reaching 1.3 million tons, worth 2.2 billion USD.
The shortage of semiconductor chips in the global auto industry is holding back rubber demand
Rubber is currently used mainly in the automotive tire industry, but global car production is facing many difficulties due to a shortage of semiconductor chips.
According to the China Association of Automobile Manufacturers (CAAM), sales in the world’s largest auto market reached 2.07 million vehicles in September, down 19.6 percent year-on-year. marked the fifth consecutive month of decline as a prolonged shortage of semiconductor chips and a domestic power supply crisis disrupted production.
Around the world, entering October, many leading automakers had to stop production due to a shortage of chip supply. At the same time, September car sales in Europe, the US and Japan were announced to show a rather large decline.
In Europe, car sales in the region in September fell to their lowest level since 1995 due to a global shortage of semiconductor components.
Figures from the European Automobile Manufacturers Association (ACEA) show that the number of new passenger car registrations in September fell by 23.1% year-on-year to 718,598 vehicles.
In which, sales in all major markets in the EU recorded a double-digit decline: Italy down 32.7%, Germany down 25.7%, France down 20.5% and Spain down 15.7%.
The US auto market is no exception when experts in this country’s auto industry forecast that US new car sales in September will decrease by about 25% compared to the same period in 2020.
In Japan, according to a preliminary report by the Ministry of Finance of this country, Japan’s auto exports in September decreased by 40.3% over the same period in 2020.
Some market observers say that the semiconductor chip shortage is expected to continue until 2022 and return to normal in 2023.
Besides the production shutdown due to the global shortage of semiconductor supplies, there are other worrying new factors, such as the energy crisis in China and the United Kingdom, while the cost of raw materials is not enough. raw materials are on the rise. These factors are likely to cause new car sales to continue to decline in the coming months.
According to the Association of Natural Rubber Producing Countries (ANRPC), global natural rubber production increased 2.2% year-on-year to 1.3 million tons in September. In contrast, consumption is estimated estimated to decrease 2.3% to 1.2 million tons after strong growth for 8 consecutive months. In which, China decreased by 9%, India decreased by 16.3%, Thailand decreased by 16.1% and Malaysia decreased by 6.1%.
In October, ANRPC expects consumption to continue to decline by 3% year-on-year to 1.1 million tons.
Rubber prices are difficult to repeat the strong increase as in the fourth quarter of last year
In the first 20 days of October, world rubber prices suddenly increased sharply due to fears of floods in Thailand disrupting the supply of the world’s largest rubber exporter. In addition, the stronger world crude oil price also positively affects the demand for natural rubber compared to synthetic rubber.
But the biggest obstacle for the natural rubber market today is still weak demand, which leads to a situation where prices go up quickly and down quickly.
In Japan, after increasing 19.3% in the first 20 days of October, RSS 3 rubber price for November delivery on TOCOM exchange fell 5% to 227 yen/kg on July 26.
Similarly, the price of natural rubber on the Shanghai Exchange for November delivery rose 9.6% in the first 20 days of October but fell 7.3% just a week later to 13,375 yuan/ton on the delivery day. translated October 26.
Particularly in Thailand, RSS 3 rubber price maintained an increase of 7.6% compared to the end of September to 63.72 Baht/kg.
Rainfall in the main producing areas in Southeast Asia has now decreased, but the market is still concerned about the impact of La Nina climate on natural rubber production. Even so, the main manufacturing regions in Southeast Asia are moving into peak production season and supply is expected to increase.
Meanwhile, the shortage of semiconductor chips has forced many car manufacturers to cut production, sales decline and energy-cutting policies are expected to continue to restrain demand for natural rubber. .
Therefore, market analysts believe that rubber prices are unlikely to increase as strongly as in the fourth quarter of last year, but there is not much room to decrease.