The price of rubber in the fundamentals is determined with two misunderstandings and long-term good

Rubber is a scarce strategic resource in China. Last year, domestic demand for natural rubber was 3.6 million tons, but the output was only 687,000 tons, and 80% of supply was dependent on imports. Therefore, there is consensus in the market for domestic supply, but there are big differences in the ability to accept downstream consumption and changes in domestic industrial policies. Recently, the Securities Times reporter went deep into the rubber plantation processing, the listed companies related to tire production, and the large-scale traders in Hainan and Shanghai, and conducted a full-scale industrial chain research to sort out the context of the market.

In the domestic futures market, rubber can be described as an "old star," and it has performed well every year. The year-on-year increase was as high as 54%. In 2011, the rubber market was magnificent and the domestic rubber price hit a new high of 4,35500 yuan/ton in February and fell to 32,535 yuan/ton in just one month. Behind this, both the macro-control, the non-fundamental aspects of Japan's earthquake, and the market's division of its fundamentals.

A certainty: The supply gap will exist for a long time

Rubber is a scarce strategic resource in China, and 80% of supply depends on imports. For our country, the rubber supply gap will exist for a long time. The difference lies in whether the gap between supply and demand will increase or decrease in the coming years.

Rubber is a typical tropical economic crop, and its growth has strict requirements on latitude. Domestic planting is concentrated in Hainan, southern Yunnan, and Leizhou Peninsula in Guangdong. Therefore, the rubber planting area in China is basically stable, and the amount of rubber produced depends on the age of the trees and the existence of super typhoons and other natural disasters. At the end of 2010, the total area of ​​rubber plantation in the country was approximately 15.08 million mu, and 580,000 mu of newly-added and phase-out rubber fields were renewed, accounting for 4% of the total area. The data of Haijiao Group that we surveyed is also basically in line with the national situation. The company has eliminated and updated 8-10 million mu of rubber trees each year, accounting for about 2.5% of the company’s total holding of 3.53 million mu. The rubber tree can be cut after 6-8 years of cultivation. In 2005, Hainan was damaged by a super typhoon rubber forest. At that time, the company's rubber production dropped from about 210,000 tons in previous years to more than 150,000 tons. Now, these are damaged. After taking measures such as replanting, the rubber forests gradually entered the cut-off period. It is expected that the production of Hainan Rubber will increase in the next two years. According to the estimation of China National Natural Rubber Association, the domestic production in 2011 is expected to increase by 50,000 tons to reach 730,000 tons.

However, due to the low self-sufficiency rate of rubber in China, the supply of rubber must be viewed from a global perspective. Judging from the information transmitted from the previous Qingdao Rubber Annual Conference, the production of rubber in Southeast Asia has increased slightly in these two years and will not increase until 2015.

From the demand side, after the international financial crisis, the global automotive industry moved eastward, and tire production capacity in emerging economies such as China, India, and Southeast Asia increased explosively, driving demand for natural rubber raw materials. In 2010, the apparent consumption of natural rubber in China was 3.6 million tons, and the output of rubber tires was 770 million, an increase of 19.8% over the same period of last year. On this basis, the major tire manufacturers in the past two years in the global expansion of production capacity will also be gradually released, is expected to increase 2 million tons of rubber demand, which is calculated using 40% of the proportion of natural rubber, but also an increase of 800,000 tons, must Will increase the shortage of domestic rubber supply shortage.

From a global perspective, in 2010, the global rubber production was 10.27 million tons and the consumption was 10.44 million tons, and the gap was 170,000 tons. We have noticed that the investment budget of the world's major tire manufacturers in 2010 was more than 8 billion U.S. dollars, and plans to add 100 million sets of tire production capacity, which is more than tripled in 2009 and the second highest investment budget year in 25 years. The production capacity of new tires and expansions of tire companies can generally be put into production within a year or so. It can be seen that from this year onwards, rubber demand is expected to enter a new round of peaks, while rubber production is only below 6% annual growth rate, globally. It will be an indisputable fact that the rubber supply gap will be enlarged. The International Rubber Research Organization (IRSG) calculated from the model that by 2020, the rubber gap will reach 1.6 million tons.

Misconception 1: Tire industry hopes price drops

At the beginning of the year, news that tire companies were uncompetitive with rising rubber prices had caused concern. The Rubber Industry Association had statistics on key member companies at the beginning of the year. In 2010, 9 tire companies lost 9 losses, the loss reached 20.9%, and the loss amounted to 232 million yuan, an increase of 290.5% over the previous year. Correspondingly, the price of rubber raw materials soared, with an increase of up to 54% in 2010.

One of the conclusions drawn is that in order to protect the tire industry, the government will rigorously regulate rubber prices. Judging from the information we learned from the survey, this is not the case. For rubber prices, tire companies do not think that the lower the better. There is an industry ecology issue here.

According to the person in charge of a listed company of tires, domestically-funded tire companies are facing the challenge from internal and external competitors. On the one hand, they are small factories that produce large quantities of low-end tires in China, including many underground workshops in Shandong, and their products do not have three guarantees and do not issue invoices. Some even directly use scrap tires to engrave and renovate their sales. Due to cheaper prices and higher production capacity, they are impacting the sales of domestic regular tires. On the other hand, international brand tire giants have entered China in recent years, and they use global marketing advantages. , Its target price strategy for the sale of product prices in China, concentrated firepower to seize the domestic market.

In the tire industry's cost structure, raw materials account for about 75%, and the remaining 25% are management and financial costs. The lower rubber prices are favorable to domestic underground factories. When profitable, they will use sufficient horsepower to produce a large number of low-end tires to hit the market. When the cost of raw materials exceeds 80%, these factories will stop production. Therefore, for the domestic large-scale manufacturers, they do not want rubber prices to be low to stimulate the level of underground factory production.

On the other hand, rubber procurement plans for the world’s top ten tire giants such as Europe, the United States, Japan, and South Korea are strong, long-term contracts are significant, and long-term contracts are mostly planned forward cargoes, and inventory turnover is not less than 5 months. Therefore, foreign investment The cost of the giant has an advantage. However, the cycle of rubber procurement by domestic tire companies is relatively short, from 2-3 months in 2008 to a one-month average turnover in 2010; inventory levels are also low. Although this model reduces the risk of price declines, it is very passive for sharp price increases. Therefore, domestic tire manufacturers hope that the price of rubber will be stable, and the level they can afford is approximately 34,000 yuan/ton-42,000 yuan/ton.

One person in the industry known as one of the four major rubber kings also confirmed to us that the upstream and downstream of the rubber tire industry in the country is actually dependent on each other. Although rubber prices fluctuate drastically, there are ways for traders and tire manufacturers to adjust. The impact is not as big as the outside world thinks.

Misunderstanding II: Tariff Cuts Impact on Jiaojia Price

In February of this year, domestic rubber prices reached a record high of 4,35500 yuan/ton. The National Development and Reform Commission immediately convened a meeting of farmers, traders and tire companies to discuss countermeasures. After the meeting, five measures were announced, although there was no mention of the State Reserve selling and reducing tariffs. However, the industry is expected to have strong, which led to a sharp decline in domestic rubber prices. However, we learned from the investigation that the real impact of tariff cuts on prices may be lower than expected.

The Rubber Industry Association and Tire Enterprises have called for a reduction in natural rubber import tariffs. The reason is that when the country set a 20% natural rubber import tariff, the international natural rubber supply was oversupply and the price was low. However, nowadays rubber needs a lot of imports, and the degree of foreign dependence is getting higher and higher. Another reason that has not been disclosed is that in recent years many domestic companies have acquired rubber orchards or processing plants abroad, and they are more likely to reduce tariffs.

At present, China adopts a selective tariff on imported natural rubber, that is, in the case of 20% ad valorem tax and specific tax, the tariff is lowered from 2600 yuan/ton to 2,000 yuan/ton in 2010. . Due to the high price of rubber, the actual implementation has always been based on quantitative measurement.

However, our investigation found that the real impact of tariff adjustments on prices was less than expected. This is because domestic rubber tire companies avoided the switch tax, and the first was through zero-tariff compound rubber imports. In recent years, the import volume of compound rubber has surged from 37,000 tons in 2002 to 482,000 tons in 2007, reaching 1.01 million tons by 2010. The second is to use the import method of processing trade to make a secret purchase. One strange phenomenon is that the proportion of natural rubber imported to processing imports accounts for far more than the proportion of tire exports. Part of the imported natural rubber has been written off internally, and it has also become disguised smuggling. In addition, domestic rubber prices are also upside down compared to Japan's Tokyo. As a result, natural rubber tariffs are virtually useless. As such, the impact of tariff cuts on rubber prices will be limited. The Rubber Industry Association and tire companies have called for a reduction in tariffs. The ultimate goal may be to eliminate the problem of over-combination of rubber compound, rather than directly suppressing prices.

We know that when there is a 5% or more supply gap in any industrial product, there is room for price increases. Although this year's rubber supply gap is not yet large, it will continue to expand, then the rubber price will have the support on demand. Therefore, we generally judge that rubber prices will be an upward trend in the long term, which may be affected by short-term effects such as macro-control, new plastic listing, and natural disasters.

The basket shaped Johnson screen is a kind of tubal Johnson screen. It is rolled by the wedge-shaped profile wire and the support rod. The shape of slot opening is generally round hole and other holes are square hole, cross hole, bridge hole, arbitrary hole and so on.

2.1basket shaped johson screen

The material: 304, 321, 316 L, 904 L, duplex stainless steel 2205, duplex stainless steel 2507, Monel alloy, titanium, etc. by changing the material, quantity, the way of woven, the size of V-shape stainless profile wire and support rods and the size of the slot opening, we can make out the perfect basket shaped Johnson screen to suit your work condition.

Our product enjoys the advantages of high mechanical strength, resistance to pressure, temperature, aging and corrosion,

 

Basket Shaped Johnson Screen

Water Well Screen,Basket Shaped Johnson Screen,Stainless Steel Basket Shaped Johnson Screen,Johnson Wedge Wire Screens

Xinxiang Shengda Filtration Technique Co., Ltd. , http://www.shengdafiltration.com