Natural Rubber Market Review (May 22)
Market Review: In May, natural rubber dry rubber showed a clear inverted V-shaped trend. Increased rainfall in major domestic and international producing areas in the first ten days of the month materialized, while processing plants had strong restocking demand. Raw material supply couldn't keep up with demand at the beginning of tapping, and procurement prices continued to reach new highs. Strong support from the cost side of natural rubber fueled bullish sentiment in the market.
Downstream tire companies resumed production as planned after the holiday, and industry operating rates rebounded. Coupled with a reduction in natural rubber spot inventory, the natural rubber market performed relatively strongly after the holiday, boosted by multiple positive factors.
However, as the expected increase in production in domestic and international producing areas gradually materialized, upstream factories pressured for lower raw material prices, putting downward pressure on raw material prices. Downstream resistance to high-priced supplies continued to rise. Under the pressure of multiple negative factors, rubber prices, after reaching new highs, lacked upward momentum and gradually fell back from their highs, subsequently entering a weak consolidation phase.
Supply Side
Thailand: Thailand entered the rainy season, with localized rainfall temporarily affecting tapping. However, the trend of increasing raw material supply continued, and factories' pressure to lower prices weakened raw material prices. Vietnam: Overall rainfall in Vietnam's rubber-producing areas is favorable, and the tapping process is proceeding as expected. Currently, Vietnam is in the full-scale tapping phase, with new rubber production further increasing compared to the previous period. Short-term rainfall has had relatively little impact on tapping operations. Based on the current situation, a concentrated influx of raw materials is expected around June.
Yunnan: Tapping in Yunnan is generally proceeding normally, with a relatively optimistic outlook for raw material supply. Raw material prices have begun to decline, and the rush for concentrated latex has slowed compared to the previous period. However, there is still some competition in the main rubber block producing areas.
Hainan: Intermittent rainfall in Hainan has disrupted tapping operations, slowing the seasonal increase in new rubber supply. The availability of raw materials in the market is tight. Some concentrated latex processing plants in the region are continuing to bid higher prices to secure raw materials to meet their production and order needs. However, other processing plants are facing pressure from costs and orders, resulting in a relatively weaker purchasing sentiment.
On the demand side, the semi-steel tire market is relatively stable. Domestically, post-holiday restocking and increased distributor order meetings boosted channel demand, leading to a significant increase in retail purchases.
While exports were affected by weakening European and Middle Eastern markets, the EU has not yet implemented provisional anti-dumping duties, and overall orders remain resilient. Rising raw material prices increased cost pressures, fueling expectations of price increases within the industry, and some companies have begun to withdraw price discounts for certain specifications.
Regarding all-steel tires, the market performance was mixed. Domestic restocking was concentrated, coupled with distributor order meetings boosting purchasing activity, resulting in good overall channel purchasing performance.
Exports faced significant pressure, with weakened shipments to the Middle East and Europe, increasing pressure on companies primarily handling Middle Eastern orders. Costs were also supported by rising raw material prices, narrowing profit margins and increasing calls for price increases, with the possibility of further tightening of promotional policies.
Looking ahead, in the short term, supply from domestic and international production areas is entering a seasonal recovery cycle, raw material prices still have room to decline, cost support continues to weaken, and market sentiment is gradually becoming more bearish. However, downstream companies' restocking demand at lower prices provides a floor, limiting the downside potential of the natural rubber market in the short term, which may result in a volatile and weak consolidation.
Our platform connects hundreds of verified Chinese chemical suppliers with buyers worldwide, promoting transparent transactions, better business opportunities, and high-value partnerships. Whether you are looking for bulk commodities, specialty chemicals, or customized procurement services, TDD-Global is trustworthy to be your fist choice.
