Chinese rubber consumption is expected to increase

Large increase in the number of corporate hedging

"The current international financial crisis is still spreading. Affected by the deterioration of domestic tire consumption, the consumer confidence in the rubber market is seriously deficient." Yang Yanping, director of the Yunnan Agricultural Reclamation Bureau, one of China's two major rubber-producing giants, said, "Making full use of spot and futures Sales were made in two markets. In 2009, we increased hedging efforts in the futures market. According to reports, by the end of May, Yunnan Farming Co., Ltd. hedged 15,700 tons of natural rubber on the Shanghai Futures Exchange, an increase of 41% over the same period of last year. .

Affected by the international financial crisis, the price of natural rubber futures at home and abroad has experienced severe fluctuations since 2008. The domestic rubber price once fell from 28,000 yuan/ton to 10,000 yuan/ton. As the largest consumer and importer of natural rubber, China's rubber industry is vulnerable to price fluctuations. Deng Yayi, secretary-general of the China Rubber Industry Association, disclosed that from January to March of this year, the sales revenue of the rubber industry dropped by 12% year-on-year, the industry’s loss ratio reached 34%, and the loss amounted to 1.7 billion yuan.

Against this background, actively using the futures market to avoid risks has become a choice for many companies. According to reports, as a rubber production company in Yunnan Province, the first five months of this year, production increased by 73% year-on-year, is expected to produce 215,000 tons of natural rubber, an increase of 73.7% over the previous year. Yang Yanping said that the futures market is of great significance in promoting the steady and rapid development of the production and operation of enterprises.

China's consumption is expected to increase

Rubber prices have gradually stabilized since the beginning of this year, but global rubber consumption will continue to decline, while China's consumption is expected to increase. Schmidt, general secretary of the International Rubber Research Organization, predicts that global rubber consumption will drop by about 7% in 2009, while consumption in China will increase by 4% to 5%. Deng Yachen, secretary-general of the China Rubber Industry Association, predicts that the growth rate of the rubber industry in 2009 will still be around 9%, and the increase in the tire industry is basically around 8%.

In spite of this, experts believe that the situation in the rubber industry in the first half of the year is not optimistic and related industries are still in a passive situation. According to Tan Yukun, deputy secretary-general of the tire division of China Rubber Industry Association, in 2008 tire companies encountered two difficulties. In the first half of the year, raw material prices soared, including natural rubber prices, which rose to nearly 28,000 yuan/ton; The tire market shrank at once, many tire companies had to cut production and stop production, and all indicators fell sharply. As many tire companies purchased a lot of high-priced raw materials in the second half of last year, it was difficult to improve in the first half of this year.

“Strictly rising, reducing the decline, some indicators have improved signs.” China National Rubber Industry Association Secretary-General Deng Yaxi outlined the next step the Chinese rubber industry is facing the situation. Since China's imports of natural rubber accounts for about 79% of the total consumption, and foreign dependence is quite high, relevant experts believe that properly increasing the use of the futures market to serve the real economy will be an effective choice to avoid industry risks.

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