Natural Rubber Daily: Prices Turn Red, How Far Can It Go?

On August 5, the STR20 price index in the Qingdao natural rubber market was 2,205 USD/ton, up 15 USD/ton from the previous trading day.

Futures Market:

Spot Market

Supply Side:

Overseas: Overall rainfall in Thailand increased month-on-month, but trading remained quiet due to holidays. Processing plants showed limited willingness to purchase raw materials, with only small-volume restocking for immediate needs. Combined with persistent expectations of increasing supply, raw material purchase prices continued to decline.

In Vietnam, recent concentrated rainfall disrupted tapping operations, leading to a significant contraction in new rubber output, providing clear support for raw material prices and costs.

Domestic: In Yunnan, rainfall persisted for most of the time, affecting rubber collection. As spot price declines impacted raw materials, purchase prices eased slightly.

In Hainan, rainy weather continued to disrupt tapping operations. Fresh latex supply on the island remained tight, and local processing plants had limited actual purchasable raw material volumes, maintaining a competitive bidding trend.

Demand Side:

According to reports, enterprises under maintenance are gradually resuming production. Some have returned to normal levels, while others are in the process of ramping up, which will drive a gradual recovery in operating rates. At the beginning of the month, individual semi-steel tire manufacturers offered limited policy support, reportedly in the range of 2-3%. However, as some agents had already stocked up moderately at the end of last month, the current boost to overall shipments remains limited, with most other manufacturers maintaining a wait-and-see approach.

Futures and Spot Price Overview

Today, the futures market continued range-bound oscillation with light trading activity. On the supply side, persistent rainfall in both domestic and overseas production areas has increased overseas factory shipment activity. Raw material purchase prices have stabilized after declining, strengthening cost-side support. Downstream demand maintained limited essential inquiries with few actual transactions. Combined with improving commodity market sentiment, rubber prices may rebound from declines. However, the seasonal increase in supply continues to cap upside potential.