In February 2024, the average export rubber price reached 1,481 USD/ton, an increase of 5% compared to January 2024. This increase has opened up positive prospects for the Vietnamese rubber industry
Rubber prices are expected to continue to increase
The latest issue of the Agriculture, Forestry and Fisheries market newsletter of the Department of Import and Export (Ministry of Industry and Trade) said that from the beginning of March 2024 until now, rubber prices on Asian trading floors have tended to increase. In the context of high oil prices and weather concerns in Thailand, supply is limited.
Rubber prices are expected to continue to increase in the coming months due to growing concerns about supply as Southeast Asia has entered the low harvest season, lasting from February to April 2024.
Specifically, at the Osaka Exchange (OSE), rubber prices increased sharply compared to the end of last month. On March 11, 2024, the near term RSS3 rubber price was at 326.5 Yen/kg (equivalent to 2.22 USD/kg), up 9.7% compared to the end of February 2024 and up 60,000 yen. 9% over the same period in 2023.
Rubber prices are expected to continue to increase in the coming months due to growing concerns about supply. (Illustration)
At the Shanghai Futures Exchange (SHFE), RSS3 rubber prices are in an uptrend. On March 11, 2024, the near-term delivery price of RSS3 rubber was at 14,150 CNY/ton (equivalent to 1.97 USD/kg), up 2.6% compared to the end of February 2024 and up 19.5%. compared to the same period in 2023. Regarding inventory, the week to March 8, 2024, the amount of natural rubber inventory at the Shanghai Futures Exchange reached 215,333 tons, an increase of 899 tons; The amount of imported goods reached 210,080 tons, an increase of 220 tons compared to the previous period. Natural rubber inventory at warehouse No. 20 reached 118,339 tons, an increase of 3,427 tons; The amount of imported goods reached 111,384 tons, an increase of 605 tons compared to the previous period.
Meanwhile, the amount of natural rubber inventory in Qingdao Free Trade Zone reached 129,500 tons, down 0.5 thousand tons compared to the previous period. Natural rubber inventory at Qingdao general commercial warehouse reached 428,100 tons, down 2,100 tons compared to the previous period.
In Thailand, rubber prices continue to increase sharply. Closing the trading session on March 11, 2024, RSS3 rubber price fluctuated at 86 Baht/kg (equivalent to 2.43 USD/kg), an increase of 7.4% compared to the end of February 2024 and an increase of 59,000 USD/kg. 9% over the same period in 2023. The Thai Meteorological Agency has warned of adverse weather that could potentially damage crops.
Positive prospects for the domestic rubber industry
In 2024, Ba Ria Rubber Joint Stock Company strives for exploitation output of 9,250 tons; Processing strives to reach 14.05 thousand tons; Consumption (including purchasing) strives to reach 10.45 thousand tons; Of which, exports strive to reach 3 thousand tons. In 2023, the company will exploit more than 9,829 tons of rubber latex, reaching 102.93% of the year's plan, with an average yield of 1.55 tons/ha. Rubber latex consumption reached more than 11,403 thousand tons, reaching 108.1% of the plan; Of which, more than 3.98 thousand tons were exported, reaching 132.4%.
Meanwhile, Loc Ninh Rubber Company Limited aims to produce 12,850 tons of dry rubber in 2024, purchase 3,500 tons, and consume 17,000 tons. In 2023, the Company has exploited 12,825 tons of latex, exceeding 9.1% of the assigned output plan. Garden productivity reached 1.68 tons/ha, with 2/7 farms reaching 2 tons/ha.
Vietnam's export rubber prices also increased, opening up positive prospects for the Vietnamese rubber industry. (Illustration)
Regarding the rubber export situation, citing statistics from the General Department of Vietnam Customs, the Import-Export Department said that in February 2024, rubber exports reached 87.75 thousand tons, worth 129.94 million USD, down 58.3% in volume and 56.2% in value compared to January 2024; Compared to February 2023, it decreased by 33% in volume and 29.7% in value.
The reason for the decrease in export output is that in February 2024 there will be a Lunar New Year holiday in both Vietnam and China, so Vietnam's rubber export activities are affected. Accumulated in the first 2 months of 2024, rubber exports reached 298.24 thousand tons, worth 426.92 million USD, up 12.1% in volume and 16.1% in value compared to the same period in 2023.
Regarding export prices, in February 2024, the average export rubber price reached 1,481 USD/ton, up 5% compared to January 2024 and up 4.9% compared to February 2023.
Also according to data from the Import-Export Department, in February 2024, China is still Vietnam's largest rubber export market, accounting for 66.89% of the country's total rubber exports, with nearly 58% of the country's rubber exports. 7 thousand tons, worth 84.12 million USD, down 65% in volume and 63.9% in value compared to January 2024; Compared to February 2023, it decreased by 40.5% in volume and 37.8% in value. While many export industries are worried about Red Sea tensions and rising shipping costs, the rubber industry will be less affected by this issue, because the main export market is China.
The average export rubber price to China is 1,433 USD/ton, up 3.2% compared to January 2024 and up 4.4% compared to February 2023.
Accumulated in the first 2 months of 2024, Vietnam exported about 226.51 thousand tons of rubber to China, worth 317.09 million USD, up 10.1% in volume and 14.4% in value compared to the same period in 2023. In February 2024, the amount of rubber exported to some markets decreased compared to February 2023 such as: China, India, Taiwan, Indonesia, Turkey, Japan... On the contrary, exports to some markets such as Korea, the United States, Germany, Russia, Italy, Brazil, Spain, and Turkey still grow well in both volume and value compared to February 2023.
Natural rubber prices are currently rising to a seven-year high due to growing demand from China's electric vehicle industry, coupled with poor output in Thailand and Indonesia. Vietnam's export rubber prices also increased, opening up positive prospects for the Vietnamese rubber industry.
According to experts, there are a series of factors simultaneously influencing the increase in rubber prices, among which the factor that must be mentioned is the booming car sales in China. According to the China Association of Automobile Manufacturers (CAAM), in the first half of 2023, new car sales mainly fluctuated at a low level of 2 million vehicles per month. By November 2023, sales rose 27.4% from a year earlier to 2.97 million vehicles, then to 3.15 million in December 2023, a 23.5% increase. CAAM expects that the country's car sales in 2024 will increase to about 31 million vehicles.
Rising auto sales boost demand for natural rubber. According to Michelin, in December 2023, China's demand for tires for new vehicles increased by 30% compared to a year earlier. Analysts and rubber traders believe that the price of this tire raw material will continue to stabilize at a high level in the near future.
For the European Union (EU), in 2023, Vietnam will be the 12th largest rubber supplier outside the bloc to the EU with 67.82 thousand tons, worth 94.35 million Eur (equivalent to 102.86 million VND). USD), down 17.4% in volume and 39.6% in value compared to 2022. Vietnam's rubber market share in the EU's total rubber imports from non-bloc markets accounts for 3.23%, higher than 3.02% in 2022.
Also according to statistics from the European Statistics Agency, in 2023, the EU imports rubber (HS 4001, 4002, 4003, 4005) from markets outside the bloc reaching over 2.1 million tons, worth 4 million tons. 38 billion Eur (equivalent to 4.78 billion USD)... this shows that the room for rubber export to this market is still very large, so domestic businesses need to diversify products, Increase the rate of processed rubber to increase export value.
