Natural Rubber Market Update (January 23)
Index
On January 23, the Qingdao STR20 price index for natural rubber was $1950/ton, up $45/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Rubber trees in northern Thailand are beginning to shed their leaves, entering the final stage of rubber tapping. Tapping in northeastern Thailand is expected to continue until around early February, with factories showing a decreasing trend in daily rubber collection. Weakening overseas demand and domestic buying sentiment have led to a downward trend in Thai raw material prices, but the downside potential is limited. Weather conditions in Vietnam's producing areas are relatively favorable; however, due to seasonal factors, overall latex production is significantly lower than during the peak season, and the dry content of raw latex is declining accordingly. Tapping is expected to gradually cease by the end of this month.
Domestic: Tapping has ceased in Yunnan and Hainan.
Demand Side: It is understood that semi-steel tires and all-season tires are being stocked up for the Spring Festival; snow tires are seeing a slight increase in trading due to lower temperatures in the north, with demand awaiting snowfall and ample supply; all-steel tires saw increased stocking in December, with slow digestion during the off-season. This month, tight funds and a focus on cash collection have led to increased channel inventory in the middle and late parts of the month. Next week, there will be a strong demand for snow tires in northern China, while stockpiling of all-season tires will be cautious due to funding constraints and high inventory levels. All-steel tires will only see sales driven by immediate needs during the off-season.
Futures and Spot Prices Overview
Market Outlook
Today, futures prices rose sharply, and spot prices followed suit. Downstream purchasing intentions have rebounded, with most buyers replenishing their stocks at lower prices, leading to an overall improvement in market activity.
Overseas, northern Thailand and central and northern Vietnam are transitioning to reduced production and even production stoppages, resulting in a decrease in total supply. Overseas raw material prices are more likely to rise than fall, maintaining cost support.
The natural rubber market is under pressure from both import volumes and inventory levels, while upstream costs lack the momentum for sustained upward breakthroughs, creating a mixed market environment for rubber prices in the short term.
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