Market News

At 10:47 HKT, SHFE rubber RU2701 traded at CNY 18,740/t, down 2.57% from the 3 November settlement of 19,235, having touched 18,720 (-2.68%) at 09:50, the lowest since 30 October. BR, EB and SC fell alongside it in a broad chemical-chain decline, with magnitudes shown in the table.

Breach test: RU closed 86 consecutive minutes below the effective threshold of 18,985.5 from 09:06, bottoming at 18,720 at 09:50 (1.40% beyond the line), and had not recovered by 10:46. The move is far beyond the 1.2% marginal zone, so the near-line clause does not apply. All three bases breach in the same direction: -2.57% versus the settlement, -1.29% versus the day-session open of 18,985 and -1.52% versus the previous reading of 19,030, so this is not a gap. The last alert on this basis was 10-29 10:24 and was released on 30 October; this is the first since that release.

Drivers and supply: Supply is the main driver: Thai latex fell to THB 84.50/kg (-1.0) and cup lump to THB 75.50 (-0.5). Demand remains weak, with all-steel and semi-steel tyre operating rates below recent years, October heavy-truck sales down 13% year on year and September passenger-car sales down 24%. A broad commodity sell-off, a firm dollar and a macro data vacuum added pressure, with the largest prior gainers cut first. Physicals have not followed: on 3 November whole latex stood at 18,900 (only -50), Thai 20# blend at 18,450 (-80) and Qilu BR9000 at 17,100 (+50); Qingdao natural rubber stocks were 562,000 t, down 2.62% on the week, with BR inventory at 39,600 t and operating rates at 58.6%, both low, while the butadiene benchmark rose 1.25% to 14,900.

Futures have therefore flipped to a discount: RU2701 sits CNY 160 below whole latex at 18,900, having been CNY 285 above it on 3 November, and BR2612 is CNY 810 below 17,100. What is falling is the peak-season and macro expectation, not the cargo on hand.

Direction: Rubber is mildly weak, with natural rubber supply balanced and BR tight; the chemical chain is down and crude is range-bound, neither benchmark clearing the line by more than 0.25%. For the next one to three sessions rubber is put at 30% up / 45% range / 25% down (model estimate, not a traded guarantee). Further weakness if Thai feedstock stops falling or Qingdao restocks; a rebound if the discount exceeds CNY 500 or tyre makers begin restocking.

Procurement and pricing: Do not chase the fall, and do not infer physical cuts from the futures drop: the discount already prices in the decline while physical offers have not been cut a second time. Re-take valid plant and trader offers on identical grade, tax basis, delivery and payment terms, recording validity, available volume and lead time. Ship confirmed orders in lots against the stock gap and defer non-essential restocking until day-session offers are out. Re-escalation: RU 18,553. Release: back above 19,042.65 at two comparable readings. The BR line at 16,043, EB at 9,719.3 and SC at 665.2 are all untouched.

To be confirmed: All eight Eastmoney items returned missing values (HTTP 502, not zero), so domestic data come solely from Sina fixed-month snapshots. Third-party BR physical quotes this morning stand at both 16,550 and 17,350, a 4.8% spread, with the actual move to be confirmed in the day session. API data showed a 5.267 million barrel weekly draw in US crude, with EIA figures due at 23:30 HKT tonight.

SUNTA Market Intelligence Department