Rubber Special Issue - No. 20260226
1. Rubber Spot Market Analysis
This week, rubber futures maintained an upward trend. Southeast Asian producing regions are in their seasonal low production period, leading to a continued contraction in raw material supply. Overseas raw material prices are on an upward trajectory, resulting in high costs for processing plants. Downstream demand for high-priced raw materials is limited, and social inventory is accumulating significantly, putting downward pressure on spot prices.
Macroeconomic sentiment fluctuated significantly during the holiday, and rubber futures saw a marked rise on the first trading day after the holiday. The seasonal tightening of supply and the combined effect of macroeconomic sentiment constituted the main support for the strong rise in rubber prices.
This week, spot market offers for natural latex rose significantly. The macroeconomic commodity market sentiment was positive, and rubber futures surged. From a fundamental perspective, overseas producing regions are entering their low production period, and tight raw material supply has led to a continuous rise in purchase prices, driving up the US dollar shipment prices for Southeast Asian processing plants.
Cost support is significant, and market bullish sentiment is growing, all of which have driven a substantial increase in domestic spot prices. However, downstream product manufacturers have not yet resumed production and are reluctant to accept high-priced raw materials, resulting in limited actual transactions.
Market Outlook:
1. Global natural rubber supply is in a low-production period, maintaining relatively strong cost support;
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, Fed rate cuts, etc.
2. Natural Rubber Supply Analysis
2.1 Thailand Production Area
During the cycle, raw material procurement prices in Thailand continued to rise strongly. Large-scale tapping in northern and northeastern Thailand led to a strong price for cup lump rubber; tapping gradually ceased in southern and northern Thailand, resulting in a contraction in total output.
Factories had restocking needs, leading to a supply shortage of latex and continuously pushing up prices. Factory raw material inventories are generally around 2-3 months, showing a downward trend compared to the same period last year. The rubber market saw a strong rise after the holiday, with domestic arbitrageurs actively increasing their positions. Thai factories were actively shipping, with shipments scheduled for August/September.
2.2 Vietnam Production Area
This week, Vietnam's main natural rubber producing areas have largely ceased tapping, with only a small number of areas in the south still tapping. 3L and concentrated latex production lines have gradually stopped purchasing raw materials. Rubber processing plants have low inventory pressure and limited willingness to actively offer prices.
2.3 Yunnan Production Area
This week, raw material prices in Yunnan production areas remained stable, and the area has entered its off-season.
2.4 Hainan Production Area
Raw material prices in Hainan production areas 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 Areas: Thailand
The theoretical production profit of Thai STR20 rubber improved slightly compared to the previous period. During the period, the price of cup lump rubber continued to rise, providing strong cost support. Factory offers saw significant increases, and the profit of Thai standard rubber improved slightly compared to the previous period, but it remains in a small loss-making state.
3.2 Domestic Production Areas: Hainan
Hainan natural rubber has officially entered its off-season; local processing plants have gradually ceased operations.
4. Analysis of Natural Rubber Demand
4.1 Downstream of Dry Rubber
The operating rate of semi-steel tires in China is 31%. The operating rate of all-steel tires in China is 26%.
This week, the tire operating rate has significantly increased compared to the previous period. The previous period coincided with the Spring Festival holiday, during which most companies suspended production, resulting in a low operating rate for the year.
After the holiday, many tire companies gradually resumed work from February 22nd (the sixth day of the Lunar New Year) to February 24th (the eighth day of the Lunar New Year), with a few companies resuming work on February 19th (the third day of the Lunar New Year). Production schedules are gradually increasing, boosting this week's operating rate significantly compared to the previous week.
4.2 Downstream of Concentrated Rubber
It is understood that glove factories in North China have gradually resumed production, with an average operating rate of approximately 10-20%. Most operating companies are continuing production based on existing orders, with limited new order growth.
Due to the continuous rise in raw material and cost prices before and after the holiday, factories are facing increased production cost pressures. Many are adopting a wait-and-see attitude regarding current raw material prices, and their raw material and finished product inventories are mostly sufficient for 1-3 months of use.
It is understood that foam factories in Wenzhou have not yet resumed production, and are expected to gradually return to normal operations after the Lantern Festival (January 15th of the lunar calendar). Before the holiday, factories' finished product inventory was basically maintained to meet order demand, and raw material reserves are generally sufficient for 1-3 months of production.
After the holiday, finished product sales will still face some pressure, with limited expectations for new order growth. At the same time, raw material prices have risen significantly after the holiday, increasing cost pressure on factories. Therefore, it is expected that after resuming operations, factories will prioritize digesting existing inventory, resulting in relatively insufficient demand for spot purchases.
5. Natural Rubber Price Spread Chart
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