Natural Rubber Market Weekly-No. 20260115
1. Rubber Spot Market Analysis
This week, rubber spot prices rose slightly following futures prices. Overseas factories replenishing their inventories and improved EU orders made raw material prices more likely to rise than fall. Downstream purchasing intentions were relatively weak, with most purchases focused on just-in-time restocking. Demand was weak, resulting in a short-term tug-of-war between bulls and bears in the natural rubber market, leading to a volatile price trend.
This week, spot prices for natural latex continued to rise. Southeast Asian processing plants offered high prices for USD-denominated shipments, providing strong cost support. Spot market circulation in sales areas gradually decreased, and traders continued to hold back sales and offer higher prices. However, downstream product manufacturers were hesitant due to high raw material prices, coupled with a surge in exchange rates in the futures market, leading to a wait-and-see attitude in the market and negotiated actual transactions.
Market Forecast:
1. Rainy weather will continue to have a disruptive impact, with raw material supplies gradually being released;
2. The operating rate of tire sample companies is expected to increase in the next cycle;
3. Inventory levels in Qingdao, China, continue to accumulate;
4. Exchange rates, Fed rate cuts, etc.
2. Natural Rubber Supply Analysis
2.1 Thailand Production Area
Overall rainfall disturbances in Thailand have decreased, entering the seasonal peak rubber tapping season. Recently, some Thai factories have replenished their smoked sheet (SFB) inventory, leading to a diversion of latex and a continued rise in procurement prices. Improved demand from the EU and better factory orders have driven up cup lump (CUP) prices.
Thai factories' raw material inventories are generally maintained at 1-2 months, with some reaching around 3 months, lower than the same period last year. During this period, domestic traders increased their positions through arbitrage, overseas orders were acceptable, and factories were actively shipping, with shipments scheduled for March-August.
2.2 Vietnam Production Area
This week, temperatures in Vietnam's production areas showed a slight upward trend, but the dry content of raw materials continued its seasonal decline. Coupled with the approaching end of the month for tapping in the central and northern regions, overall raw material output showed a seasonal decrease. Some factories stocked up in advance for the end of tapping, maintaining their purchasing enthusiasm and pushing up overall raw material prices.
2.3 Yunnan Production Area
This week, raw material prices in Yunnan's production areas remained stable as the region entered its off-season.
2.4 Hainan Production Area
Raw material prices in the Hainan production area are currently unavailable, and the tapping season has officially begun.
3. Natural Rubber Cost and Profit Analysis
3.1 Overseas Production Area: Thailand
The theoretical production profit margin for Thai STR20 rubber narrowed compared to the previous period. This week, cup lump prices rose sharply, increasing raw material costs, but factory quotations saw limited increases, leading to a compression of profit margins for Thai standard rubber, narrowing compared to the previous period.
3.2 Domestic Production Area: Hainan
Natural rubber in Hainan has officially entered the off-season; local processing plants are gradually shutting down.
4. Natural Rubber Demand Analysis
4.1 Downstream Dry Rubber
The operating rate of semi-steel tires in China is 73%. The operating rate of all-steel tires in China is 63%.
This week, as maintenance shutdowns at companies gradually stabilized, output increased significantly compared to the previous week. Increased export orders for some semi-steel tire companies boosted the operating rate of semi-steel tires. Some all-steel tire manufacturers have seen a significant increase in finished product inventory. To control the rate of inventory growth, some production control measures are in place, limiting the extent to which the operating rate of all-steel tires can be increased.
4.2 Downstream of Concentrated Rubber Latex
It is reported that foam factories in Wenzhou are operating at approximately 40% capacity. With the year-end approaching, there is a trend of reduced orders for finished products, and some factories have moderately lowered their operating rates. During the week, both futures and spot market prices rose simultaneously, and market bullish sentiment increased, boosting the stockpiling sentiment of some companies. However, given the significant cost pressures still facing companies, production profit margins are squeezed, and purchases of high-priced raw materials are only maintained at the level of immediate needs. We will monitor changes in demand.
It is reported that glove factories in North China are operating at an average level of approximately 60%. The glove industry is gradually entering its seasonal off-season, with generally weak domestic sales orders for finished products and the impact of substitutes, leading to cautious restocking intentions among factories. Currently, the inventory levels of raw materials and finished products at processing plants are generally not high. With the year-end approaching, some companies are showing signs of temporary stockpiling, but the actual sentiment remains cautious and wait-and-see. We will continue to monitor demand.
5. Natural Rubber Price Spread Chart
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