July average RSS3 price announced by Central Rubber Market in Songkhla stood at 45.35 Baht/kg, down 5.11 % from June due to the following factors. Downstream demand is weak as tyre sales are flat, coupled with a possible drop in vehicle sales in China in contrast with robust sales growth in the European Union in June, the highest June total on record. There was concern about growing rubber inventories in Japan and China. The mid-July slide in the oil price reflected widespread weakness in commodity markets as trade tensions escalated between the US and China, coupled with Libya’s production resumption. The increase in fuel prices has lifted headline inflation in advanced and emerging market economies. The increase of core inflation in emerging markets reflected pass-through effects from currency depreciation in some cases and second-round effects of higher fuel prices in others. China is now using a weak RMB to fight the US which may now lead to a currency war. However, certain positive factors lent support to rubber price. Chinese government policy of monetary and fiscal easing in the second half of the year might stimulate demand, but the impact will be limited. There was an increase in demand among exporters in Thailand amid tight output due to heavy rains.
In June, Thailand exported 286,214 tons of natural rubber (including compound rubber), down 5.14 % from May, up 9.56 % yoy, generating export income of US$ 407.57 million, down 6.04 % from May and 7.43 % yoy. Overall, during the first half of 2018, Thai NR exports (including compound rubber) reached 1,868,382 tons, up 3.41 % yoy. The YTD export value touched US$ 2.62 billion, down 23 % yoy.
In tyre sector, in June Thailand exported 11.05 million units of all tyres, down 2.16 % yoy, with the export value of US$ 416.72 million, up 2.34 % yoy. Overall, during the first half of 2018, Thai exports of all tyres reached 64.69 million units, up 6.71 % yoy, generating export revenue of US$ 2.36 billion, up 12.45 % yoy.
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