Downstream recovery falls short of expectations; rubber market is being "led" by news developments

Last night’s rubber main contract maintained fluctuations around the 17,000 yuan per ton level, with wide-range volatility occurring for several consecutive days. The current quote is 17,070 yuan/ton. Based on yesterday’s situation, downstream rubber demand still does not perform ideally. Shandong rubber tire companies’ fully steel tire operating load is 68.64%, up 2.23% from last week and down 0.45% from the same period last year. Domestic semi-steel tire companies’ operating load is 76.69%, up 3.17% from last week and down 6.11% from the same period last year. Semi-steel exports to the Middle East have slowed, with some exports concentrated to the EU, but overall the volume of exports to the Middle East has little impact. On the fundamentals side, seasonal production cuts upstream have led to expectations of raw material shortages, causing BR to rebound sharply. The main synthetic rubber contract BR2604 closed at 15,540 yuan/ton, up 3.6%. Regarding other commodities, especially crude oil, the INE main crude oil futures closed up 73.10 yuan/barrel yesterday, an increase of 11.26%, at 722.30 yuan/barrel. Although news of crude oil reserves releases somewhat alleviates the expectation of tight future crude oil supply, the ongoing Middle East military conflicts still create uncertainty. The supply and transportation of crude oil in the Middle East are unlikely to ease in the short term. Recently, influenced by news, many commodity futures have experienced significant volatility, and uncertainty has increased. Overall, the fundamentals for rubber remain long-term bullish, and cautious investment is recommended at this time.