Market report 1st April 2019
Jun 30 ,2020 430
Here is a snapshot showing the movement of prices on the Futures markets and Physical prices declared by major NR producing countries:
RSS 3 THB
SVR 3L USD
SMR 20 MYR
21st Nov. 2018 (low)
4th March 2019 (high)
1st April 2019 (present)
*12th March 2019
Factors pertinent to price direction are as follows:
- Elections in Thailand are over (without any clear winner). One of the major reasons for the spike in prices from November to March was government intervention and this factor is now neutralized for the time being.
- Production is down to 30-40% in the deep south of Thailand. Most factories have shut down for the annual “wintering season”.
- Weather reports are pointing to the El Niño patterns but it cannot be said with any degree of certainty whether the opening of the new season for NR will be impacted. We are however experiencing very hot weather and some producers have shut down due to scarcity of water to run their factories rather than lack of raw materials.
- Prices of crude oil are range bound
- There is not much pressure on producers to sell as inventory levels are low and new production is at a standstill for now
We expect prices to find support near present levels.
Going forward, adverse weather would be the single most important factor capable of driving prices sharply higher.
We suggest covering some quantities at present levels.