CITIC Futures: Weather forecast speculation drives rubber market prices higher

We believe that recent weather hype has been quite intense, with the market generally expecting a strong El Niño, leading funds to enter early positions. Although there are no obvious negative factors at present and the downside is limited, the current weather speculation is within expectations. However, since overseas markets have not fully entered the off-season, it is still difficult to determine whether weather will impact future supply. Based on the short-term high raw material prices and the domestic inventory reduction performance, the market still faces some pressure to break through previous highs. Aside from weather speculation, supply-side variables are limited, and in the short term, more attention can be paid to the expectations gap on the demand side. Previously, due to Middle Eastern geopolitical conflicts, the market generally held a weak outlook for short-term downstream demand. However, the latest tire production data does not show the expected decline, and export figures remain stable, which may also be one of the reasons for the current warm market sentiment. Moving forward, we temporarily maintain the view that the market will fluctuate within a wide range, observing the resistance near previous highs and patiently waiting for a pullback to buy on dips. (CITIC Futures)