Will Natural rubber price still drop?

Will Natural rubber price still drop?

Rubber prices are determined by supply and demand. For China manufacturer of rubber products manufacturer IKSONIC I think, you can not have too much price expected to decline in value.
First, the supply side, in 2014 there have been a great turning point, almost exactly one year price relationship between natural rubber and synthetic rubber was reversed, Chinese natural rubber consumption increased by 60 million tons more than last year, changed from 2003 since cumulative supply and demand imbalance, basically reached the supply and demand balance. This can be verified from the natural rubber imports and apparent consumption in 2014, China’s apparent consumption of natural rubber for the first time more than 5 million tons, which is does not appear in history before, and even more than 45% of the total global supply of . At that time the industry believes that the price of natural rubber should be stabilized. But by the end of 2014, the state issued a new standard composite rubber, in the new role of standards, the industry is natural rubber prices have very high expectations. But at the same time, due to the sharp decline in international oil prices, synthetic rubber prices continue to decline. Under both the action from the first half of 2015, China’s actual use of natural rubber in the fall, so that supply and demand change again, parity between natural rubber and synthetic rubber also reversed again, resulting in natural rubber prices continued to decline.
Secondly, from the demand side, demand for natural rubber declined. China’s total demand in natural rubber, 70% for tires, steel tire which accounted for more than 60%, so the steel tire production decision of the Chinese demand for natural rubber. China’s natural rubber consumption accounted for 1/3 of the total global consumption, so China’s demand for natural rubber also determines the global consumption of natural rubber. According to the China Rubber Industry Association statistics, from January to October 2015, major tire companies tire output grew (below) fell 6.70%, of which steel tire production fell 6.69 percent; and the results of market research, the average operating rate of only steel tire 65%. In this depressed state, the tire industry has been suffering from the US “double reverse” and seriously affect the foreign market downturn. According to customs statistics, from January to October 2015, Chinese exports of passenger tires 1.458 million tons, down 8.1%; truck and bus tire exports of 2.589 million tons, down 0.4%. Among them, exports to the US passenger tires 268,000 tons, down 44.6%; truck and bus tires 495,000 tons, down 9%. In addition, in 2015 the United States on Chinese non-road tire “dual” review, greatly improving the tariffs, some companies tax rate increased more than five times, almost cut off opportunities for US export markets, rather than road tire demand for natural rubber it is very large.
Therefore, I believe that, in order to raise the price of natural rubber, the national policy should stroke along, you should first put up demand for natural rubber, rather than confrontation and the upstream and downstream of the downstream pressure to complete. After July 2015, a substantial decline in the number of imported adhesive, but the natural rubber prices are still “stumble endlessly”, also verified the truth. In addition, cultivation of natural rubber is a cost, but also to live a rubber tapper, once the price is far lower than the cost of natural rubber, rubber industry companies will be transferred. Thus, only the rubber industry upstream and downstream enterprises to work together with market economy rules and international practice consistent cases to support the natural rubber industry to promote the consumption of natural rubber, it is the right path.