Rubber Supply Disrupted
Domestic Production Areas: Yunnan's rubber-producing region experienced drought conditions compared to the earlier period, impacting latex production. Competition for latex between concentrated and whole latex was significant, leading to rising raw material prices. Meanwhile, the supply of rubber blocks was relatively limited, mainly due to processing plants having largely used up last year's rubber block stock, resulting in limited latex production.
Hainan's rubber-producing region: Tapping began in late March in the southern areas of Lingshui, Ledong, and Baoting, followed by early April in the western areas of Danzhou and Baisha, officially marking the start of the new rubber tapping season in Hainan's main natural rubber producing areas. Currently, the region is in the early stages of tapping, and the recent high temperatures have limited overall latex production, with some areas still primarily harvesting rubber blocks.
It is expected that large-scale tapping will gradually commence after the Qingming Festival holiday, with local processing plants subsequently starting collection and production. However, the current drought conditions in central and eastern rubber-producing areas are restricting tapping operations, and the weather forecast for the next week indicates continued high-temperature warnings for Hainan, which may further impact the normal tapping schedule.
As of now, the overall tapping season in domestic producing areas is relatively normal this year, with Yunnan even starting about a week earlier than usual. However, since the start of tapping, rainfall in domestic producing areas has been generally low. Furthermore, at the end of March, the Hainan Provincial Meteorological Bureau issued a Level IV high-temperature warning at 06:10 on March 31, 2026: It is expected that most towns and villages in eight cities and counties, including Haikou, Chengmai, Lingao, Tunchang, Danzhou, Baisha, Changjiang, and Dongfang, will experience temperatures above 37 degrees Celsius during the day on March 31.
Given the current tapping situation in Hainan, the prolonged high temperatures and drought at the beginning of the tapping season are unfavorable for normal rubber tapping. In the short term, the high temperatures and drought will continue to significantly disrupt the domestic tapping situation, slowing the overall pace of raw material supply and providing relatively strong cost support.
International producing areas: High temperatures in Thailand are causing disruptions, leading to continued increases in raw material prices. During the off-season, raw material supply is essentially in a state of high prices but low volume, with secondary traders still holding stockpiled goods.
Factories currently have raw material inventories of approximately 2-3 months, lower than the same period last year. Finished product inventories are generally low during the off-season. Geopolitical disturbances in the Middle East, rising local energy prices in Thailand, and increased fertilizer costs have increased pressure on sales.
In Vietnam, the rubber-producing region remains in the off-season. Rubber tree phenology is favorable, with no extreme weather disturbances. Tapping is expected to begin gradually from south to north in early April, with trial tapping starting in the southern region. Although the start of tapping is approaching, the short-term spot supply remains tight, and factories are still reluctant to sell.
Currently, both domestically and internationally, most regions abroad are in a state of off-season, resulting in a scarcity of raw material supply. Coupled with external disturbances, production costs are steadily rising. Thai latex prices have been steadily increasing throughout the first quarter, with relatively strong cost support.
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