Rubber price breaks through important resistance

On February 18th, Shanghai Rubber reappeared at night, which was similar to the trend on the 12th of this month. However, this time it broke through the resistance level of 12,000 yuan, while the last time it reversed the weak pattern. From the midline perspective, Shanghai Rubber is expected to break away from the bottom. The shock enters the rising cycle. Although domestic automobile production and sales in January were 2.365 million units and 2.367 million units respectively, down 12.1% and 15.8% respectively. However, the market seems to regard this news as a short-term profit, and Shanghai Rubber has not seen a significant correction. On Monday night, Shanghai Rubber suddenly increased its position and did not appear in the vicinity of important resistance.

Although the downstream enterprises have resumed work after the holiday, the demand for rubber in the short term is still limited, and the domestic automobile production and sales situation is still not optimistic, but the market has already expected this. Moreover, domestic natural rubber has long been cut, Thailand, Vietnam and other places have gradually entered the cut-off period, supply into the off-season, the pressure on the rubber price has been reduced. More importantly, after the second half of 2018, domestic autos continued to reduce production year-on-year, and international crude oil prices fell sharply from October to December, and the supply pressure of the major rubber producing countries at the peak of rubber tapping was superimposed, but the price of Shanghai Rubber was still held. Ten thousand yuan mark, and after just entering 2019, began to try to break through. In history, the 10,000-yuan mark has withstood the test of the bad environment many times. Although the current supply and demand situation is still not good, the most difficult time may have ended. The rebound in the price of rubber is the reflection of the gradual recovery of popularity.

Recently, the market’s subject matter has been intertwined. In January, the production and sales volume of automobiles was more obvious year-on-year. In the previous period, the inventory of natural rubber was still increasing (but there were signs of slowing down), and the rubber imports in the previous month decreased both year-on-year and month-on-month. The policy pushes “cars to the countryside” and Sino-US trade negotiations are expected to make progress, which makes the price of rubber prices easy to repeat.

In the long run, the supply and demand situation of natural rubber in 2019 should not be too optimistic, but it is expected to be better than 2018. Destocking is still the main task, and the supply side will become a key factor affecting the price of rubber. From the perspective of technical analysis, Shanghai Rubber has already proved the historical bottom, but in the process of recovery, it is expected that there will be technical pressures around 13,000 and 16,000 yuan respectively.