Rubber Special Issue - Issue 202606

Analysis of Natural Rubber Market Prices

Dry Rubber

In June, natural rubber dry rubber showed a clear "M" shaped trend, with a significant decline towards the end of the month. At the beginning of the month, tapping in domestic and international producing areas continued, but overseas factories actively produced to fulfill orders, maintaining a strong demand for raw materials. High raw material procurement prices provided strong cost support for rubber prices, and market bullish sentiment continued to rise.

Multiple positive factors converged, causing spot prices to break through key resistance levels and continuously reach new highs. As expectations for increased tapping capacity in various producing areas strengthened, upstream factories pressured for lower procurement prices, leading to a continued weakening of raw material prices and further easing of cost support for natural rubber. Downstream enterprises generally flexibly controlled production to digest high-priced finished product inventory, resulting in an accumulation of natural rubber spot inventory.

This weakened market bullish sentiment, putting significant pressure on spot prices, and causing rubber prices to begin to decline. Entering mid-month, the strong performance of overseas markets boosted overseas factories' enthusiasm for purchasing cup lump and smoked sheet rubber, causing raw material cup lump and smoked sheet rubber prices to rise continuously, resulting in a high-level market. However, this upward trend was short-lived.

Under the influence of interest rate hike expectations, the weakening commodity market sentiment affected rubber market trading sentiment. Furthermore, with the continued weakening of overseas raw material procurement prices and persistent expectations of increased raw material supply, rubber prices experienced a wide decline due to multiple negative factors.

Natural Latex

In June, the price trend of concentrated latex was less volatile than that of dry rubber, but the downward trend remained dominant. At the beginning of the month, rubber futures hit new highs. High overseas raw material and cost prices maintained a large price difference between domestic and international markets.

Coupled with a significant tightening of imported concentrated latex supply in sales areas, traders maintained a firm price stance, leading to a narrow upward trend in concentrated latex quotations. Entering mid-month, rainy weather in Southeast Asia slowed the start of new rubber tapping, keeping raw material and cost prices high and firm. The price inversion between domestic and international markets showed no signs of improvement. With tightening supply of imported concentrated latex in consuming regions, importers had limited room for price concessions and were unwilling to sell at excessively low prices, resulting in a prolonged period of high-level sideways movement in concentrated latex prices.

Towards the end of the month, the macro commodity market weakened, and rubber futures prices fell significantly. From a fundamental perspective, as weather gradually improved in Southeast Asia, expectations of increased supply rose, leading to a downward trend in raw material prices. Upstream processing plants faced pressure to sell, continuously lowering their USD-denominated cargo prices, weakening cost support, and fueling bearish sentiment in the market. Downstream product manufacturers adopted a "don't buy when prices are falling" mentality, showing caution in accepting raw materials at current prices, and only placing small, low-priced orders for immediate restocking.

Market Forecast:

1. In July, global supply is in a production increase phase, and cost support is expected to weaken.

2. The operating rate of sample tire manufacturers remained high in July.

3. Natural rubber social inventories are expected to continue to decline in July.

2. Rubber Market Price Comparison This Month

International Market

Domestic Market

3. Rubber Market Price Analysis Charts

Natural Rubber Supply Analysis

1. Thailand Production Area

In June, raw material prices in Thailand remained relatively high, but a downward trend has emerged, especially for latex prices, which have shown a significant decline. During this period, increased rainfall in southern Thailand led to continued tight latex production, causing latex prices to continue their upward trend. In the northeast, production was normal, with factories pushing for lower raw material prices in the first ten days of the month. Strong international market performance in the latter half of the month spurred factories to buy cup lump at higher prices, resulting in high cup lump prices as well.

Due to geopolitical disturbances in the Middle East, rising local energy costs and increased shipping costs in Thailand led factories to hold back sales at low prices, resulting in a significant weakening of orders for dry rubber factories compared to the previous month. Actual transactions were mainly within Thailand. Latex factories continued to receive orders primarily from overseas and local demand, with a small number of long-term contracts remaining with the Chinese market. Thai factories generally have about three months' worth of raw material inventory, with some factories gradually increasing their raw material reserves slightly. Finished product inventory at factories is generally low.

2. Vietnam Production Area

In June, Vietnam's natural rubber entered its seasonal production increase cycle. Early June saw localized thunderstorms disrupting tapping, while mid-June nighttime showers slowed raw material release. As rainfall subsided in the latter part of the month, tapping resumed in the core producing areas, leading to a concentrated release of new rubber. Raw material prices surged and then retreated. In the first ten days of the month, tight supply coupled with orders for concentrated latex fuels supported prices, prompting factories to rush to buy, pushing up purchase prices.

In the latter part of the month, increased latex production combined with a weakening domestic market led to a decline in latex prices from their highs, while cup lump rubber showed relative resilience. In terms of finished product production, concentrated latex processing plants maintained relatively optimistic profit margins, with raw materials and factory capacity still tilted towards them. Dry rubber production suffered losses, and overall operating rates were lower than expected.

3. Yunnan Production Area

Rainy weather continued to have an impact on Yunnan's production area in June, but given the current tapping situation, the overall impact was relatively limited. In terms of overall output, Yunnan is currently in its seasonal production increase phase, with raw material output maintaining an upward trend. Without other special influencing factors, the expectation of increased raw material production in Yunnan remains.

From the finished product perspective, the profit margin for whole latex gradually recovered this month. The decline in the profit margin for concentrated latex led to a narrowing price gap between the purchase price of whole latex and the purchase price by concentrated latex mills. Meanwhile, with increased raw material supply, whole latex production lines are operating better, and expectations for improved output are rising.

4. Hainan Production Area

Although the Hainan production area experienced periods of rain and high temperatures in June, the overall output of new latex remained relatively stable. The amount of raw material available in the market increased month-on-month, and the seasonal release of raw materials is clear. Overall, the Hainan production area is currently transitioning to a phase of slightly higher production. From the spot market perspective, with the downward trend in both futures and spot prices, and limited actual demand in the spot market, concentrated latex processing plants are facing significant pressure on their profit margins. Their willingness to pay premiums for raw materials has declined, and the purchase price of fresh latex has also entered a downward trend.

Imports and Exports

According to customs data, China's natural rubber imports in May 2026 totaled 422,800 tons, a decrease of 15.84% month-on-month and 6.74% year-on-year. From January to May 2026, cumulative imports reached 2,647,900 tons, a cumulative year-on-year decrease of 0.54%.

China's natural rubber exports in May totaled 14,300 tons, an increase of 13.38% month-on-month and 47.51% year-on-year. From January to May 2026, cumulative exports reached 48,600 tons, a cumulative year-on-year increase of 7.06%.

Technical Classification of Natural Rubber

In May 2026, China's imports of natural rubber, including technical classifications, totaled 104,200 tons, a decrease of 20.72% month-on-month and 29.73% year-on-year.

Natural Rubber Latex

In May 2026, China's imports of natural rubber latex totaled 16,100 tons, down 54.31% month-on-month and 44.18% year-on-year. Imports of smoked natural rubber sheets in May 2026 totaled 18,400 tons, down 36.19% month-on-month and 20.97% year-on-year.

Mixtures of Natural and Synthetic Rubber

In May 2026, China's imports of mixtures of natural and synthetic rubber totaled 222,600 tons, down 16.50% month-on-month and up 0.14% year-on-year.

2. Import and Export Trend Chart

Global Rubber Production

ANRPC's latest April 2026 report predicts that global natural rubber production will decrease by 2.6% to 772,000 tons in April, a decrease of 0.8% from the previous month; natural rubber consumption is expected to increase by 2.5% to 1.235 million tons, a decrease of 5.9% from the previous month. In the first four months of the year, global natural rubber production is projected to decline by 1.7% to 3.853 million tons, while consumption is expected to decrease by 4% to 4.923 million tons.

Global natural rubber production is projected to increase by 2.2% year-on-year to 15.322 million tons in 2026. Specifically, Thailand is expected to increase by 1.4%, Indonesia by 0.8%, China by 2.9%, India by 4.4%, Vietnam by 4.2%, Malaysia by 6.9%, Cambodia by 2.9%, Myanmar by 1.1%, Sri Lanka by 12.4%, and other countries by 6.5%.

Global natural rubber consumption is projected to increase by 1.3% year-on-year to 15.55 million tons in 2026. Specifically, China is expected to increase by 1.7%, India by 3.6%, Thailand by 3.5%, Indonesia by 1%, Malaysia by 8.2%, Vietnam by 5.7%, Sri Lanka by 5.1%, Cambodia by 7.5%, the Philippines by 13.8%, and other countries by 1.2%.

Note: Global natural rubber consumption data is based on the latest figures and is for reference only.

Natural Rubber Inventory Analysis

In June, Qingdao's natural rubber social inventory continued its downward trend. At the beginning of the month, overseas USD-denominated shipments arrived slightly, boosting overall inventory inflows. Multiple positive factors in the natural rubber market led to rubber prices continuously reaching new highs during the cycle. However, cautious buying in the RMB market resulted in a significant month-on-month decline in overall outflows, with general trade inventory accumulation exceeding expectations, leading to an increase in total spot inventory at Qingdao port.

As overseas USD-denominated shipments declined again, overall inventory inflows decreased month-on-month. Furthermore, downward pressure on natural rubber prices stimulated tire manufacturers to replenish their stocks at lower prices, driving overall inventory reduction at Qingdao port. In the latter half of the month, with the rapid decline in spot prices and continued weak downstream demand, tire manufacturers generally held a bearish outlook, replenishing their stocks only as needed, slowing the destocking trend.

Analysis of Natural Rubber Demand

Tires

In June, the operating rate of semi-steel tires in China was 69%; the operating rate of all-steel tires was 65%.

From the perspective of operating rates, the overall operating rate of tire companies in June rebounded slightly compared to the previous month. This was mainly due to the fact that more tire companies underwent equipment maintenance during the May Day holiday than during the Dragon Boat Festival holiday.

As both months had holidays, this provided some support for the relatively strong operating rates. However, tire companies faced multiple pressures in June, including rising raw material costs and reduced orders leading to slower shipments, intensifying production and operational pressures. During the Dragon Boat Festival holiday, some companies arranged 3-5 days of production shutdowns for maintenance, and some companies reduced production within the month, which also contributed to keeping the overall operating rate at a relatively low level in June.

Semi-steel tires: In the first ten days of this month, the domestic semi-steel tire market saw sluggish trading, with transactions mainly focused on replenishing inventory. Overall shipments were slow, market supply was ample, and inventory digestion was hampered. 

Some distributors introduced preferential policies to accelerate cash flow, but the effect was limited, and mainstream market prices remained stable. Entering the latter part of the month, the semi-steel radial tire market remained stable, with limited end-user demand and continued accumulation of channel inventory. 

Manufacturers gradually began pre-Dragon Boat Festival maintenance and production control, slowing the increase in supply. However, dealers' destocking pace remained slow, and while temporary discounts continued, they only slightly boosted sporadic orders, with no significant signs of improvement in the market.

All-steel radial tires: In early June, rainfall in Northeast and Southern China increased freight travel difficulties, resulting in a sluggish overall replacement market. Coupled with thin transportation profits and a longer replacement cycle, channel sales were mainly scattered orders, and dealers experienced slow payment collection. Overall inventory was far above normal levels, and the willingness to restock was weak. Market prices remained relatively stable, with some companies offering promotional policies, but the market showed no significant changes, and a wait-and-see attitude prevailed.

Entering the latter part of the month, demand for all-steel radial tires remained weak, with insufficient support from logistics replacement demand. High inventory pressure on dealers at all levels remained unresolved, and restocking operations remained low. With factories undergoing concentrated maintenance and reducing supply, merchants are mainly focused on consuming existing inventory. As upstream raw material prices continue to decline, the market is generally worried that finished product prices will follow suit, leading to a cautious purchasing mentality and a strong wait-and-see atmosphere among merchants.

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