Rubber Market Downward Risk
Index
On December 1st, the Qingdao STR20 price index for natural rubber was $1835/ton, down $10/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
Internationally: Northeast Thailand maintained peak production, leading to a decline in cup lump prices; Southern Thailand was hit by torrential rains, with some areas experiencing continuous heavy rainfall and flooding risks, affecting tapping and factory production, resulting in firm latex prices; Weather in Vietnam's producing areas varied regionally.
Southern Vietnam remained sunny, with tapping conditions continuing to improve, and supply returning to normal levels. Central Vietnam was affected by a typhoon, with heavy rainfall in producing areas, disrupting tapping operations in some areas and causing some disturbance to supply, supporting raw material prices at high levels.
Domestically: Raw material prices in Yunnan production areas remained relatively stable, but raw material procurement volumes weakened, leading to difficulties in sourcing rubber for some processing plants. In Hainan production areas, favorable weather conditions allowed for normal rubber tapping, but temperature and other factors caused yellowing and leaf drop in rubber plantations in the central and eastern regions, resulting in a decrease in overall raw material output. Some processing plants, to ensure their own production needs, slightly raised prices to secure raw materials, leading to relatively strong raw material procurement prices.
On the demand side: It is understood that some semi-steel tire manufacturers are experiencing short-term maintenance plans due to insufficient orders, and a few companies have unexpectedly suspended production, dragging down the operating rates of semi-steel tire manufacturers. Most all-steel tire manufacturers have resumed regular production, resulting in a recovery in operating rates, but some companies still have upcoming maintenance plans. Overall, the tire supply side remains weak.
Spot and Futures Prices Overview
Market Outlook
Today, the main rubber futures contract fluctuated and weakened, with spot offers following suit and adjusting downwards. As the market's speculation regarding domestic production cuts due to the cessation of tapping and overseas flooding gradually diminishes, the expectation of increased supply during the seasonal peak production period will dominate as the floods recede.
Overseas raw material procurement prices may shift from strong to weak, coupled with sluggish improvement in end-user demand, posing a risk of further price declines for rubber.
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