Natural Rubber Price Trend
[Introduction] Domestically, factors such as rainfall, decreased dry content, and the approaching end of the tapping season have led to a situation of "high prices but no market." As domestic producing areas gradually approach the end of the tapping season, expectations of tighter raw material supply are intensifying, and raw material costs are beginning to rise. Given this cost support, can natural rubber prices maintain their upward trend?
Supply Side: In Thailand, the northeast maintained peak production this cycle, while heavy rainfall in southern Thailand affected tapping. Some factories are sourcing raw materials from the northeast, leading to an upward trend in latex and cup lump prices.
Factory raw material inventories range from 30 days to 60-90 days, with southern factories having lower inventories but maintaining normal production and long-term contract deliveries. Procurement by Thai local and international tire manufacturers remains neutral.
In Vietnam, weather improved this week, with reduced rainfall in the main producing areas, optimizing tapping conditions and gradually restoring supply to normal levels. However, sporadic localized rainfall still disrupted raw material supply.
Constrained by high raw material prices in Cambodia, factories are mostly using a blend of Philippine, Myanmar, and local raw materials, showing limited acceptance of high prices. This tight supply situation supports high prices.
In Yunnan, raw material prices remained relatively stable. Starting this week, Yunnan's rubber-producing areas gradually entered the off-season, with high-altitude areas ceasing tapping early in the week, including some newly tapped saplings.
However, frequent rainfall further accelerated the cessation of tapping. Overall, the region is experiencing a situation of high prices but low market activity, with rainfall impacting supply and secondary traders showing little interest in selling.
In Hainan's production area, localized rainfall and strong winds increased disruption to rubber tapping operations. Additionally, as temperatures began to drop, the dry latex content declined, generally falling to the 26-29°C range, suppressing overall raw material output. Local processing plants are gradually entering winter stockpiling phases, continuing to purchase raw materials at higher prices, resulting in firm procurement prices.
Downstream Demand: China's semi-steel tire operating rate is 69%. China's all-steel tire operating rate is 62%. This week, tire operating rates declined. Some sample companies in both all-steel and semi-steel tire sectors experienced internal maintenance shutdowns, dragging down the operating rate. The main reasons for these maintenance shutdowns were insufficient overall orders and slowed shipments. Additionally, some sample companies underwent equipment upgrades, affecting overall capacity release.
In summary: Spot prices for natural rubber are trending slightly upwards. Domestic production areas are gradually entering a period of reduced output, and weather factors have accelerated the off-season for rubber tapping in Yunnan.
Domestic raw material prices remain firm, while heavy rainfall in southern Thailand has disrupted tapping. High overseas raw material prices are providing strong support for rubber prices from the supply side.
Natural rubber inventories are entering a seasonal accumulation cycle, and downstream inquiries have improved slightly, with cautious purchases driven by immediate needs. In the short term, without strong positive stimuli, natural rubber prices are expected to fluctuate within a range.
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