Shanghai rubber price very likely to rise further

Shanghai rubber price nearly doubled throughout 2016. Generally, natural rubber price is widely expected to go up further during 2017 although a few people may disagree.

Shanghai rubber price hit a record high of 21,800 yuan/ton in January 2017 after a serious flood struck southern Thailand.

Accordingly, Thailand plans to sell out rubber inventories in three batches, which is expected to boost rubber price in a short term.

Currently, the rubber tapping season is drawing to an end in major rubber growing areas, leading to a smaller rubber supply. Market participants will focus on the rubber consumption capacity of downstream industries.

Since 2016, Chinese tire makers have seen a great demand on strong production and sales of vehicles. In January this year, heavy truck sales increased more than one time.

Under the strong demand, tire manufacturers shortened the Spring Festival holiday and resumed production at a high operation rate.

The much higher raw material price has also boosted the tire price. It is expected more tire makers would raise tire price in the near future.

In 2016, the strong price of compound rubber helped lift the natural rubber price. From the beginning of 2017, the compound rubber price continued rising with a strong momentum.

Generally, it is very possible for the Shanghai rubber price to increase further, despite of some uncertainties.