August 2025: Rubber and Carbon Black Prices

1. Natural Rubber: A Fluctuating, Weak Pattern Amid Supply-Demand Game

Price Dynamics and Market Sentiment

As of August 5, 2025, the main natural rubber futures price was 14,420 yuan/ton, down from the previous day. The base price was 14,433.33 yuan/ton, down 1.81% from the beginning of the month. The market is experiencing a narrow range of consolidation.

Although some downstream tire manufacturers have resumed production, order volumes have significantly decreased, and actual demand growth has been limited. Recent weather disturbances in major Southeast Asian producing areas have eased, raising expectations for increased new rubber production in countries like Thailand and Indonesia.

Coupled with a slight accumulation of domestic inventories (Qingdao's social inventory increased to 419,600 tons), concerns about loose supply are dominating short-term market sentiment.

In-Depth Analysis of Supply and Demand Fundamentals

On the Supply Side: Major producing areas in Southeast Asia have entered their peak production period. Heavy rain in southern Thailand on August 4 may impact rubber tapping progress in the short term, but the overall upward trend in production remains unchanged.

According to the ANRPC, global natural rubber production is expected to increase by 0.5% to 14.892 million tons in 2025, with emerging production areas such as China and Côte d'Ivoire contributing the majority of this growth. Although production in Yunnan and Hainan provinces in China was temporarily disrupted by rainfall, full-year output is expected to increase by 21.3% year-on-year, gradually easing supply pressure.

On the demand side, the tire industry faces structural differentiation. Full-steel tires, dragged down by declining heavy-duty truck sales, saw their operating rate drop to 61.06%. While semi-steel tires benefited from passenger car demand, export growth slowed (tire exports grew 7.3% year-on-year from January to May, lower than the same period last year). Weak end-user consumption has led to high finished product inventories in tire manufacturers, resulting in cautious purchasing behavior.

Cost and Policy Impacts

Prices for raw material glue have fallen from their highs, but remain higher than in previous years, marginally weakening cost support. Although the EU's EUDR regulation has been postponed until the end of 2025, traceability requirements have already led to a divergence in rubber trade flows.

The export premium to the EU market (approximately $300/ton) has attracted capacity relocation from Southeast Asia, leading to a 42% year-on-year decline in Chinese imports, further exacerbating domestic supply pressures.

Market Outlook

In the short term, natural rubber prices are likely to fluctuate between 14,300 and 14,500 yuan/ton. Continued rainfall in Yunnan and downstream inventory replenishment remain important.

In the medium to long term, the conflict between increasing supply (global production is expected to increase by 10% month-on-month in the second half of the year) and weak demand will drive prices downward, potentially targeting 14,000 yuan/ton.

2. Carbon Black: The Balance Between Cost Support and Supply and Demand

Price Trends and Market Characteristics

On August 5, the Carbon Black Index opened at 1206.46, down 0.3985% from the previous day. The price of N330 in Shandong remained at 6,300 yuan/ton. The market presents a bifurcated pattern of "strong cost support and weak transaction reality": high raw material coal tar prices (up 12% year-on-year) are driving carbon black companies to maintain their prices; however, downstream tire manufacturers are clearly resistant to high prices, and actual transactions are primarily driven by rigid demand.

Supply-Demand Disparity and Industry Structure

On the Supply Side: Total carbon black supply in the first half of 2025 increased by 18.47% year-on-year, far exceeding the 4.27% growth on the demand side. Overcapacity has led to a continued weakening of companies' bargaining power. In June, the industry's operating rate fell to 67.67%. Some small and medium-sized factories have reduced production due to losses.

However, leading companies (such as Yongdong Co., Ltd.) are gradually optimizing their product mix by releasing specialty carbon black production capacity (including the commissioning of a 70,000 tons/year lithium battery conductive carbon black production line).

On the demand side: The tire industry accounts for 70% of carbon black demand, but in July, the operating rates of full-steel and semi-steel tires fell to 61.06% and 74.63%, respectively. Furthermore, the penetration rate of new energy vehicles has slowed (currently at 35%), resulting in lower-than-expected demand for high-end carbon black.

However, overseas markets performed well, with carbon black exports increasing by 17.7% year-on-year from January to April, with Russia and Southeast Asia as the main growth markets.

Cost and Policy Drivers

Coal tar accounts for over 80% of carbon black production costs. Coal tar prices have increased by 12% year-on-year due to production restrictions in the coking industry, providing short-term cost support. However, with crude oil prices trending downward (Brent crude oil is expected to be between $66 and $73 per barrel in 2025), and prices of alternative raw materials such as ethylene tar weakening, medium- and long-term cost pressures will gradually ease.

Furthermore, the EU carbon tariff (CBAM) is increasingly restricting energy-intensive carbon black production, driving the industry towards greener processes.

Market Forecast

In the short term, carbon black prices are likely to fluctuate between 6,300 and 6,500 yuan/ton, with coal tar price fluctuations and changes in export orders being the main variables.

In the second half of the year, with the release of new production capacity (such as the commissioning of Yongdong Co., Ltd.'s needle coke project), the supply-demand imbalance will intensify, and the average price is expected to drop to 6,503 yuan/ton, potentially leading to losses for some companies.

3. Industry Chain Interactions and Risk Warnings

Cost Pressures on Tire Companies

Natural rubber and carbon black account for over 60% of tire raw material costs. The simultaneous rise in their prices (natural rubber increased by 25% and carbon black by 2.86% in the first half of 2025) is compressing tire companies' gross profit margins.

Leading companies are shifting costs through large-scale procurement and product upgrades (such as low-rolling resistance tires), but the space for small and medium-sized manufacturers is further shrinking.

Substitute Materials and Technological Changes

Synthetic rubber (such as butyl rubber) is increasingly substituting for natural rubber due to weaker butadiene prices (down 20% year-on-year). At the same time, demand for lithium-ion conductive carbon black (used in new energy vehicle batteries) is booming, with the global market projected to reach 7.6 billion yuan in 2027, driving structural differentiation in the carbon black industry.

Risk Factors

Weather Risk: The Southeast Asian typhoon season may disrupt rubber tapping, triggering a short-term rebound in natural rubber prices.

Policy Risk: Uncertainty surrounding the implementation details of the EU EUDR Regulation may impact rubber trade flows.

Demand Risk: Expectations of a global recession are rising, and tire export orders may decline more than expected.

Natural rubber: Short-term volatility is expected to be weak. Focus on the 14,000 yuan/ton support level in the medium to long term. Tire manufacturers are advised to replenish inventory in batches at low prices to avoid unilateral short selling risks.

Carbon black: Due to the balancing act between cost and supply and demand, price elasticity is relatively low. Companies can lock in coal tar purchases through long-term contracts while expanding into specialty carbon black to increase added value.

Industry Chain Collaboration: Upstream and downstream companies are advised to strengthen inventory management and utilize futures instruments to hedge against price volatility risks. They should also focus on structural opportunities brought about by the increasing penetration of new energy vehicles.

In August 2025, the natural rubber and carbon black markets will show a differentiated pattern of "weak natural rubber and stable carbon black". The contradiction between supply and demand and the game driven by cost will run through the whole year. Enterprises need to flexibly adjust their strategies to cope with market changes.