Natural Rubber: Supply and Demand Game
Index
On July 14th, the Qingdao STR20 price index for natural rubber was $2215/ton, up $20/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Strong storms in parts of Thailand disrupted rubber tapping, leading to stockpiling by factories and secondary dealers, resulting in a temporary tight supply of raw materials and further price increases. Vietnam's rubber-producing regions entered their seasonal peak production period, with overall raw material supply maintaining a normal pace. However, frequent localized thunderstorms and uneven rainfall distribution led to fluctuating rubber production. Due to the continued increase in raw material supply, processing plants adopted a wait-and-see approach, continuing to pressure prices for rubber.
Domestic: Continued rainfall in Yunnan's rubber-producing areas suppressed raw material production, limiting the amount of raw materials available for processing plants, resulting in a slight increase in raw material prices. Weather improvement in Hainan's rubber-producing areas was limited, with continued rainfall disrupting new rubber production. The increase in available raw materials in the market was insufficient, significantly restricting the operation of local processing plants. Some factories slightly raised prices to secure raw materials.
On the demand side: It is understood that most of the sampled enterprises that underwent maintenance have resumed normal production, boosting the overall recovery of operating rates. However, due to external factors and order constraints, some enterprises are still undergoing phased maintenance, limiting the overall increase in operating rates. Additionally, promotional policies are being interspersed with sales to increase shipments and boost sales, but the overall effect is generally limited.
Futures and Spot Prices Overview
Market Forecast
Today, futures prices fluctuated narrowly, while spot prices for natural rubber remained generally stable. Market inquiries were subdued. On the supply side, continued rainfall in major domestic and international producing areas is disrupting rubber tapping operations, making it difficult for latex production to fully recover.
Raw material prices remain relatively high, while downstream enterprises are purchasing only for immediate needs. Market trading activity is weaker than expected, limiting the upward potential of rubber prices. The short-term trend of natural rubber market fluctuations is unlikely to change.
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