Rubber prices couldn't hold up anymore
Index
On June 24th, the STR20 price index for natural rubber in the Qingdao market was $2350/ton, down $5/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Rainfall continues to disrupt production in southern Thailand, maintaining a latex shortage. Production in the northeast is normal, and processing plants are rushing to buy raw materials, driving cup lump prices to new highs. In Vietnam, intermittent showers are predominant, with most rainfall concentrated at night, having limited impact on daytime tapping. However, continuous nighttime rain is slowing the overall release of raw materials, resulting in a temporary tightness in latex production, with supply returning to about 50% of normal levels.
Domestic: Raw material prices in Yunnan have rebounded slightly, and futures prices have risen this week. The profit margin for full-latex delivery is gradually recovering, giving factories some room to raise purchase prices. The seasonal increase in raw material production in Hainan has slowed, and the region is currently in a period of moderate high production.
With favorable weather conditions, the release of new rubber production capacity is clear, increasing pressure on local processing plants to ship their products and reducing their willingness to purchase raw materials at higher prices.
On the demand side: It is understood that domestic end-user shipments in the tire industry are currently slow, while shipments in the export market are performing reasonably well, providing some support for tire manufacturers' production and sales. To alleviate production and sales pressure, most companies continue to control production to maintain prices. Currently, the industry's overall inventory is sufficient, but upstream raw material prices remain high, putting pressure on company costs. Overall, pricing policies are mostly stable.
Futures and Spot Prices Overview
Market Forecast
Today, futures prices fluctuated and weakened, and spot offers followed suit. On the supply side, Thailand has entered its seasonal production increase cycle, but continuous showers in the south are disrupting rubber tapping. Although raw material prices have declined, they remain high.
Furthermore, the El Niño phenomenon continues to intensify, raising concerns about supply in the future. Downstream, domestic end-user shipments in the tire industry are slow, and actual purchasing sentiment is weak, with a wait-and-see attitude emerging.
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