Rubber Special Issue - No. 20260129
1. Rubber Spot Market Analysis
This week, rubber futures maintained a slightly bullish and volatile pattern. Overseas producing regions are transitioning to the off-season for production reduction and tapping, resulting in a significant decrease in total supply. Coupled with overseas factories stockpiling raw materials, raw material procurement prices remain high. Spot inventories showed a phased decline during the cycle, and the overall commodity market sentiment was positive, boosting bullish sentiment. Downstream enterprises were stockpiling for pre-holiday needs, suggesting further upside potential in the natural rubber market in the short term.
This week, spot prices for natural latex rose, with traders showing strong willingness to offer. Futures prices surged, and overseas Southeast Asian producing regions are gradually experiencing seasonal production reductions and tapping shutdowns, further fueling bullish sentiment. The pressure on spot circulation in consuming areas has eased, and traders have followed suit with higher spot prices. Downstream product manufacturers have largely completed their pre-holiday stockpiling, resulting in low willingness to purchase high-priced raw materials, with actual transactions subject to negotiation.
Market Outlook:
1. Rainy weather will continue to disrupt supply, with raw materials gradually being released.
2. The operating rate of sample tire manufacturers is expected to increase in the next cycle.
3. Inventory levels in Qingdao, China, continue to accumulate.
4. Exchange rates and the Fed's interest rate cuts, etc.
2. Natural Rubber Supply Analysis
2.1 Thailand Production Area
Northern Thailand has entered the off-season for rubber tapping, while northeastern Thailand is nearing the end of its tapping season, expected to cease in early February. Southern Thailand maintains peak production. Currently, the overall Thai production area is entering a seasonal supply reduction phase, making raw material procurement prices more likely to rise than fall.
Factory raw material inventories are generally around 2-3 months' worth, and factories and secondary dealers still have restocking needs. Tire factories in Thailand have decent orders, with overseas demand being just-in-time, and factory shipments scheduled for August/September.
2.2 Vietnam Production Area
This week, the weather in Vietnam's production area was sunny, and the overall tapping season has entered its final stages. Tapping in the southern region is expected to continue until before the Lunar New Year, with local processing plants entering a stockpiling phase. Raw material prices in the production area continued to fluctuate at high levels throughout the week.
2.3 Yunnan Production Area
Raw material prices in Yunnan production area remained stable this week, with the area entering its off-season.
2.4 Hainan Production Area
Raw material prices in Hainan production area are currently unavailable, and the area has officially entered its off-season.
3. Analysis of Natural Rubber Cost and Profit Situation
3.1 Overseas Production Area: Thailand
The theoretical production profit of Thai STR20 rubber improved slightly. During the period, the price of raw material cup lump rose slightly. Coupled with the strengthening of macro commodities, overseas costs supported the rise in offers, and domestic arbitrageurs actively increased their positions, resulting in a slight improvement in the theoretical production profit of Thai standard rubber.
3.2 Domestic Production Area: Hainan
Natural rubber in Hainan has officially entered its off-season; local processing plants are gradually shutting down.
4. Analysis of Natural Rubber Demand
4.1 Downstream of Dry Rubber
The operating rate of semi-steel tire manufacturers in China is 74%. The operating rate of all-steel tire manufacturers in China is 63%.
During the period, some semi-steel tire sample enterprises were supported by foreign trade orders, resulting in a slight increase in equipment production and supporting the operating rate of semi-steel tire sample enterprises. Shipments of all-steel tires were lackluster, with some enterprises still exhibiting production control, dragging down the operating rate slightly.
4.2 Downstream of Concentrated Latex
It is understood that the average operating rate of glove factories in North China is around 60%. Affected by factors such as the slowdown in domestic economic growth, finished product orders are generally weak, with a significant year-on-year decrease.
Futures prices fell and then rebounded during the week. Some factories purchased and stocked up as needed, but under pressure from orders and costs, some factories indicated that they had no plans to stockpile this year, or would maintain a just-in-time purchasing strategy. With the Spring Festival holiday approaching, some enterprises planned to shut down next week, with most resuming operations gradually in early next month.
It is reported that the operating rate of foam factories in Wenzhou has dropped to around 20-30%, with a lack of substantial recovery in end-user order demand. Finished product inventory levels are low, with reserves primarily based on existing orders. Recent price increases in concentrated rubber futures have significantly exacerbated cost pressures on factories.
However, with difficulties in raising finished product prices at the end of the year, production profits continue to be negative, further weakening their willingness to purchase raw materials. Some companies have already begun suspending operations for the Spring Festival this week, and the scope of shutdowns is expected to expand further next week, with production activities gradually entering a period of stagnation.
5. Natural Rubber Price Spread Chart
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