Natural rubber market: A bumpy road ahead!
Index
On July 31st, the Qingdao STR20 price index for natural rubber was $2160/ton, up $5/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Rainfall in Thailand increased compared to the previous week, but market trading was somewhat sluggish due to the holiday. Processing plants showed little interest in raw material purchases, only replenishing their inventories to meet immediate needs.
Coupled with continued market expectations of increased supply, raw material purchase prices continued to decline. Recent concentrated rainfall in Vietnam's rubber-producing areas has temporarily hampered tapping operations, significantly reducing new rubber production and providing clear support for raw materials and costs.
Domestic: Rainfall continued for most of the day in Yunnan's rubber-producing areas, affecting rubber collection. Due to the impact of declining spot prices on raw materials, purchase prices softened slightly. Rainfall gradually increased in Hainan's rubber-producing areas, hindering tapping operations and resulting in reduced raw material production on the island.
On the demand side: It is understood that as the end of the month approaches, enterprise shipments are generally weak, and inventory reduction is slow. In Shandong's main producing area, some small-scale enterprises still have maintenance plans, dragging down the overall operating rate, and the supply side remains weak. Most enterprises have sufficient finished product inventory, while some enterprises restrict economical production, and some specifications are experiencing regular shortages, which has little impact on overall shipment volume.
Futures and Spot Prices Overview
Market Forecast
Today, the futures market maintained a slightly stronger oscillating pattern, with spot prices rising slightly in line with the futures. From the supply side, the periodic rainfall in domestic and international producing areas has affected rubber tapping in the short term, but it is beneficial for the later increase in supply. Raw material procurement prices may continue to be under downward pressure.
Downstream purchasing intentions are relatively weak, mainly focusing on replenishing only necessary quantities. The overall market trading atmosphere is generally weak. In the short term, the expected increase in natural rubber supply and weak demand will suppress rubber prices, lacking strong drivers, and the market is likely to remain weak and consolidating.
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