Natural Rubber Market Update (March 13)
Index
On March 13th, the Qingdao STR20 price index for natural rubber was $2015/ton, down $35/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Raw material procurement prices in Thailand continued to rise, with a significant price difference maintained. Tapping has ceased in northern and northeastern Thailand; tapping is gradually ceasing in southern Thailand, leading to a tight supply of raw materials. Factories have restocking needs, driving up procurement prices. Vietnam's production areas are currently in their seasonal off-season, with small-scale trial tapping expected to begin in late March or early April, followed by large-scale tapping across the entire production area in April.
Domestic: Good rubber tree growth in Yunnan's production areas, coupled with rainfall in some areas, has increased ground moisture, further strengthening expectations for an earlier tapping start this year. Surveys in the production areas show that most began tapping around the 20th, with the earliest factories starting around the 16th, approximately one week earlier than the same period last year.
Rubber trees in Hainan's production areas are generally growing well, which is conducive to the timely progress of the tapping plan. According to research, tire tapping in Hainan's production areas will begin in late March in Lingshui, Wanning, and Baoting, with trial tapping in a few areas of Baisha and Danzhou. The main production areas will gradually begin tapping around the Qingming Festival.
On the demand side: It is understood that tire price increases are constantly being anticipated. To mitigate the risk of high prices, distributors are moderately stocking up. Some companies, to reduce losses, are restricting purchases from distributors who have met their sales targets. After the initial stockpiling, social inventory has gradually reached a high level.
In the short term, the market will focus on channel sales and digesting inventory. Some customers who have not yet met their purchase targets are still moderately stocking up, which will continue to stimulate domestic market shipments.
Futures and Spot Prices Overview
Market Outlook
Today, futures prices saw a pullback, and spot offers followed suit. Domestic rubber production is steadily progressing with seasonal tapping, and new rubber supply is expected to gradually increase. Overseas supply is seasonally tightening, providing support at the bottom for rubber prices.
However, hindered tire exports are significantly suppressing downstream demand expectations. Whether natural rubber inventories can continue to decrease remains uncertain. With mixed market sentiment, rubber prices are likely to experience wide fluctuations.
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