Natural Rubber Market：Surges Amid Supply
Introduction: As domestic rubber-producing regions gradually enter their off-season, the overall supply-side pressure of natural rubber continues to intensify. Coupled with positive macroeconomic sentiment, the domestic natural rubber market continues its strong upward trend, with both futures and spot prices surging recently.
1. Global Supply Enters Low Production Period, Raw Material Support Remains Strong
Globally, the overall supply of natural rubber is gradually entering its low production period. Looking at different producing regions, domestically, the off-season has arrived, leading to a sharp decrease in domestic supply. Yunnan province has entered a complete off-season, with raw material supply nearing its end.
In Hainan province, due to the continued drop in temperature, the area where tapping has ceased is expanding, with only a few scattered rubber plantations and small areas in the south still having some tapping activity, resulting in a low overall harvestable volume across the island. The increased tightness of domestic raw material supply and stable factory purchase prices further solidify the supply-side support.
Overseas, in major producing regions, although Thailand is still in its seasonal peak production period, supply release is hampered. Overall, rainfall in Thailand has decreased, entering its seasonal peak tapping season. Recently, some Thai factories have had restocking needs for smoked sheet tires, leading to a diversion of latex and a continued rise in procurement prices. Improved demand in the EU and better factory orders have driven up cup lump prices.
While temperatures in Vietnam's production areas are showing a slight upward trend, the dry content of raw materials continues its seasonal decline. Coupled with the approaching end of the month for tapping in the central and northern regions, overall raw material output is seasonally reduced. Some factories are stocking up in advance for the end of tapping season, maintaining their purchasing enthusiasm and pushing up overall raw material prices.
2. Tire manufacturers' production capacity is recovering, and operating rates are improving.
The operating rate of semi-steel tires in China is 73%, and the operating rate of all-steel tires is 63%. As the production schedules of maintenance-inspected plants gradually stabilize, output has increased significantly compared to last week.
Regarding semi-steel tires, the all-season tire market is weak, with ample supply. Channels are mainly restocking for immediate needs, while sales at retail stores are sporadic, and market transaction prices remain basically stable. The snow tire market is currently in the stage of digesting end-user demand, with channel restocking mainly focused on filling gaps. Increased export orders for some semi-steel tire companies have helped boost the operating rate of semi-steel tires.
Regarding all-steel tires, market transactions remained weak. Off-season demand coupled with financial pressure led to low purchasing intentions from merchants at all levels, with most focusing on digesting existing inventory. While some distributors introduced promotional policies to their channels, the effects were limited, resulting in overall sluggish market transactions. Some all-steel tire manufacturers saw a significant increase in finished product inventory, leading to some production control measures to limit the increase in all-steel tire operating rates.
3. A Mixed Bag of Bullish and Bearish Factors: Volatile Trend Unlikely to Change
Reduced rainfall in Southeast Asia maintained the normal peak rubber tapping season, but increased restocking demand from factories made overseas raw material prices more likely to rise than fall. However, the seasonal accumulation trend of natural rubber inventories remained unchanged, and downstream production and sales pressure persisted, continuing to constrain rubber prices. With these bullish and bearish factors balancing each other, the natural rubber market is likely to experience short-term consolidation.
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