Natural Rubber: A Mix of Bullish and Bearish Factors
Index
On July 10th, the Qingdao STR20 price index for natural rubber was $2200/ton, unchanged from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Strong storms in parts of Thailand disrupted rubber tapping, leading to stockpiling by factories and secondary traders, resulting in temporary tightness in raw material supply and renewed price increases. Vietnam's production areas entered their seasonal peak, with overall raw material supply maintaining a normal pace. However, frequent localized thunderstorms and uneven rainfall distribution caused fluctuations in tapping output. Due to the continued increase in raw material supply, processing plants adopted a wait-and-see approach, continuing to pressure prices for rubber purchases.
Domestic: Raw material prices in Yunnan's production areas generally stabilized, mainly due to continuous rainfall in the main producing areas, which hampered rubber tapping and hindered rubber purchases by processing plants. The Hainan production area is still affected by typhoons and other weather factors, with continuous rainfall disrupting rubber tapping operations. Only during a brief period of slight improvement in weather mid-week did overall raw material circulation remain insufficient, and the increase in new rubber supply remained low.
On the demand side: It is understood that tire companies' supply performance varies. Leading companies are operating at a relatively good capacity, while some are reducing production due to decreased orders. Most companies in Shandong are controlling production. Since early July, companies have been taking turns conducting maintenance based on their own circumstances, dragging down the overall supply. Recently, export shipments have been relatively good, but domestic sales are under pressure.
Futures and Spot Prices Overview
Market Forecast
Today, futures prices fluctuated and consolidated, while spot offers remained largely unchanged. Holders of goods showed moderate willingness to offer. From the supply side, domestic and international production areas are currently in their seasonal production increase period, but short-term disruptions from periodic rainfall will prevent a full recovery in rubber tapping.
Raw material prices have strong downside support, and downstream tire companies continue to control production and conduct maintenance, slowing down their raw material procurement. The short-term natural rubber market is characterized by a mix of bullish and bearish factors, with the market mostly maintaining range-bound fluctuations.
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