CITIC Futures: The main driver for rubber is still the recent weather hype atmosphere.

Rubber prices continued yesterday with a slightly bullish, volatile pattern. We believe the main driver is still the relatively strong atmosphere of recent weather speculation—namely, that in a market environment where participants broadly expect a strong El Niño, funds are moving in early to set up positions. Although there are currently no obvious negative factors on the surface and the downside room is limited—and the current weather speculation is also within expectations—because overseas has not yet fully entered the tapping season, it remains difficult to conclude whether weather will affect subsequent supply. Based on the short-term high level of raw material prices and the performance of domestic inventory reduction, the market still faces some pressure to break through the previous highs. Aside from weather speculation, there are limited variables on the supply side, and in the short term we can place more focus on the demand-side expectation gap. Previously, due to geopolitical conflicts in the Middle East, the market generally held a relatively weak view of near-term downstream demand. However, based on the latest tire operating (production) performance, there has not been the expected decline, and export data also remains stable—this expectation gap may be one of the reasons why the current market sentiment is on the warmer side. Looking ahead, for now we still maintain the view that the market will remain in a wide-range fluctuation pattern. You can temporarily watch for pressure near the previous highs, while patiently waiting for opportunities to buy on dips during pullbacks. (CITIC Futures)