THE RUBBER MARKET FLUCTUATES SHARPLY IN Q2/2022

Rubber prices at major exchanges in the world fluctuated strongly with a strong upward trend in the first 15 days of April, then decreased until the end of May and recovered again in June. In July, the prices tended to decrease.

Specifically, at the Osaka Commodity Exchange (OSE) Japan, the price of rubber peaked on April 15 at 272.6 yen/kg, then fell to 238 yen/kg on May 13. recovered to 262 yen/kg on June 28, then fell again.

On July 28, the price of RSS3 rubber for delivery near term was at 251.5 yen/kg (equivalent to 1.86 USD/kg), down 3.5% compared to the end of June, but up 19.8% compared to the end of June 2021.

At the Shanghai Commodity Futures Exchange (SHFE), rubber prices continuously dropped sharply compared to the first quarter. After falling to 12,345 yuan/ton on May 9, prices tended to increase again in May, then turned down from early June to July 22.

Rubber prices tended to increase slightly in the last few sessions of July but are still at a lower level compared to the end of last month. On July 28, the price of RSS3 rubber for delivery near term was at 12,100 yuan/ton (equivalent to 1.79 USD/kg), down 4.8% compared to the end of June and down 7.6% over the same period in 2021.

In Thailand, rubber prices fluctuated strongly in the second quarter. After falling to 67.7 Baht/kg on April 28, the price rose to 73.1 Baht/kg on June 6 but then fell back due to high supply during the peak season of latex exploitation in Thailand.

On July 28, RSS3 rubber price offered for sale at 61.2 Baht/kg (equivalent to USD 1.67/kg), down 7.4% compared to the end of June, but still 10% higher than the same period in 2021.

According to the Association of Natural Rubber Producing Countries (ANRPC), the natural rubber market outlook is expected to improve further in 2022. In June 2022, global natural rubber output reached 1.1 million tons, up 3.8% over the same period in 2021; while consumption reached 1.2 million tons, up 5.8% compared to June 2021. Therefore, the supply shortage is about 93,000 tons. ANRPC forecasts that global rubber supply will continue to fall short of demand in the coming years.

In the domestic market, in the second quarter, the price of raw rubber latex in some provinces also fluctuated strongly with a strong upward trend in April, then decreased again in May and June. The downtrend continued in July 2022.

Currently, in Binh Phuoc, the price of rubber latex purchased by Phu Rieng Rubber One Member Company Limited is 307 VND/degree TSC, down 16 VND/degree TSC; The purchased price of mixed latex was 290 VND/degree DRC, down 10 VND/degree DRC compared to the end of June.

In Binh Duong, the purchasing price of raw rubber latex from Phuoc Hoa Rubber Company fluctuates at 311-313 VND/degree TSC. Gia Lai latex price was purchased by Mang Yang Rubber Company at the price of 285-295 VND/degree TSC, down 10 VND/degree TSC compared to the end of June.

What prospects for year-end growth of the industry?

Normally, the growth in business activities of enterprises will be affected by rubber price movements and market supply and demand. Therefore, when these factors fluctuate, the likelihood will be related to both revenue and profit of companies.

According to the Import and Export Department (Ministry of Industry and Trade), the rubber market in the second quarter of 2022 was strongly affected by the epidemic situation, the geopolitical crisis, the shortage of containers, high transportation costs, and a sharp increase in fuel prices. and slow customs clearance affects the global supply chain.

Therefore, rubber prices at major exchanges in the world fluctuated dramatically in the second quarter. Specifically, the price tends to increase strongly in the first 15 days of April but then decrease until the end of May and recover again in June.

In the domestic market, the price of raw rubber latex in some provinces has also fluctuated strongly with a trend similar to the world market when it increased sharply in April and then decreased again in May and June 2022.

However, Vietnam's rubber exports in the second quarter were still optimistic as the industry gradually recovered thanks to increased global rubber consumption demand.

According to statistics of the General Department of Customs, rubber exports in the second quarter reached more than 380,000 tons, worth 646.4 million USD, up 23.6% in volume and 22.3% in value over the same period in 2021. Generally, in the first 6 months of 2022, rubber exports reached about 779,000 tons, worth 1.4 billion USD, up 9.2% in volume and 12.2% in value compared to the first 6 months of 2021.

According to the forecast of the General Department of Rubber of India, in 2022, the country's natural rubber output will only reach 800,000 tons while the consumption demand will reach 1.24 million tons. Thus, India needs to import 440,000 tons to import.

Notably, by the end of the first half of 2022, Vietnam's rubber exports to India reached more than 56,800 tons, worth 103.4 million USD, up 62.4% in volume and 62.5% in value. compared with the same period in 2021; the average export price reached 1,820 USD/ton, up 2.4% over the same period in 2021.

Vietnam is currently the second largest rubber supplier to India in the first 5 months, accounting for nearly 11% of the country's total rubber imports, higher than 7.5% in the same period last year.

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