After continuous decline in the past six years, Shanghai rubber has ended low in 2016. According to the statistical data, the price of Shanghai rubber has increased by 40% since the middle of June. Insiders attributes the price increase to tighter supply and bigger consumption than expected. The fundamentals shows that shortage in supply end has not improved. The fourth quarter is the harvest season for the key producers so the market supply will continue to increase, but the raw material shortage caused by the earlier weather conditions continues to function. In this way supply shortage in October is still going on. Meanwhile, the rubber demand has continued to increase. With consumption season and various preferential policies on, Shanghai rubber will maintain strong trend within the short term.
As the price of natural rubber continues to rise, our production cost has greatly increased. We will pay close attention to the price trend of natural rubber, fulfill strict controls of raw material quality, take actions to reduce the cost to keep the product price stable.