Natural Rubber Import Up Largely to Ningbo Port in Aug 2016

According to Ningbo Customs statistics, during January-August 2016, the city of Ningbo imported 51,000 tons of natural rubber, up 53.5% year-on-year (YOY), worth RMB 330 million yuan, up 32.6% YOY; at the average import price of 6,372 yuan per ton, down 13.6% YOY. Therein, August import quantity was 7,778 tons, up 1.6 times YOY; worth 56.53 million yuan, up 1.5 times YOY; at 7,268 yuan per ton, down 4% YOY.

1. Characteristics of Natural Rubber Import to Ningbo in August:

(1) August import quantity increased both YOY and month-on-month, with average price on the low side. See the chart below:

 

(2) Most of the import was by ordinary trade.

(3) Most of the import was from Thailand with big increase.

2. Notable Problems:

(1) Oversupply of rubber remains unsolved, the stock on the rise in China.

(2) USA anti-subsidy measure has been made on Chinese tires. In late June, U.S. Department of Commerce made a preliminary ruling that truck/bus tires made in China are subsidized by the Chinese government, and imposed anti-subsidy duties at 17.06% and 23.38% on two major tire-makers and 20.22% on others in China, involving more than 100 export-oriented firms and more than one-billion-dollar worth of export goods. The final ruling will come on November 9 and the anti-subsidy measure on Chinese tires will also cut down the natural rubber demand in China.

(3) ITRC export restriction is prolonged. The International Tripartite Rubber Council (ITRC) has recently agreed to extend the period of restriction on rubber export: from September to December, Thailand should reduce rubber export by 75,750 tons and Indonesia should reduce 9,350 tons; but in fact, the planned reduction has underperformed expectation, failing to push up international rubber price; the export quota of 85,000 tons is far smaller than the output capacity worldwide, with September-December in season of rubber production, so some positive effects are still coming up.

(4) Compounded rubber is replacing natural rubber. China’s import duty on compounded rubber (HS code: 40028000) is only 7.5%, much lower than that of natural rubber, thus increasing the import of compounded rubber so as to reduce and replace natural rubber import.