Natural rubber prices have soared recently
On July 16, 2025, the natural rubber market received exciting news. Its spot price closed at 15,460 yuan/ton. This figure not only set a new high for the year, but also marked that the "15,000 yuan curse" that has plagued the market for a long time has been officially broken. After struggling at a low level for more than two years, natural rubber finally showed strong upward momentum, injecting new vitality into the long-dormant market.
Looking back on this long "price defense war", the natural rubber market has gone through hardships. Since the second half of 2022, affected by multiple factors such as the slowdown in global economic growth and supply chain disruptions, the price of natural rubber has been declining all the way, always fluctuating below 15,000 yuan/ton.
Even if it briefly broke through the 15,000 yuan mark in March 2024, it failed to form effective support and soon fell back to the low end of the range, causing great suffering to upstream and downstream companies in the industrial chain.
The successful breakthrough of the price this time is not accidental, but the result of the joint action of supply and demand. From the supply side, the main natural rubber producing areas in the world are facing multiple challenges. Southeast Asia, as the core producing area of natural rubber in the world, has recently encountered rare climate anomalies.
Affected by the El Nino phenomenon, major producing countries such as Thailand and Indonesia have experienced persistent drought weather, which has seriously affected the growth cycle of rubber trees. Data show that rubber production in southern Thailand has dropped by 12% compared with the same period last year, and the reduction in production in Sumatra, Indonesia has reached 15%.
What is more serious is that the main producing countries generally face the problem of aging rubber trees. According to statistics from the International Rubber Research Organization, the proportion of rubber trees over 25 years old in Southeast Asia has reached 42%, and the rubber production capacity of these old trees is only about 60% of that of young and middle-aged trees.
It takes 6-8 years for newly planted rubber trees to enter the high-yield period, and it is difficult to make up for the production gap in the short term. The problem of labor shortage has also become more and more prominent. In Thailand, the younger generation is more willing to enter the city to engage in the service industry, resulting in the average age of rubber tappers reaching over 55 years old. The lack of labor directly affects the efficiency of raw material harvesting.
The recovery of demand has become an important driving force for price increases. With the acceleration of the global economic recovery, demand in downstream industries has shown a comprehensive recovery trend. As the largest consumer of natural rubber, the automotive industry has performed particularly well.
Global automobile production has maintained year-on-year growth for three consecutive months, among which the sales of new energy vehicles have increased by 35% year-on-year. The order volume of tire companies has increased significantly, and many companies have started full-load production mode, and the demand for natural rubber purchases has continued to rise.
Demand in medical care, infrastructure and other fields is also growing steadily. The demand for rubber products such as medical gloves and seals continues to expand with the construction of the global public health system, and the increase in infrastructure construction investment has driven the consumption of engineering tires.
According to data from the industry association, the apparent consumption of natural rubber in China increased by 8.3% year-on-year in the first half of this year. The strong performance of the demand side provides solid support for price increases.
Faced with price increases, the reactions of various links in the industrial chain are different. Upstream rubber farmers have finally ushered in the dawn of profitability, and the enthusiasm for tapping has increased significantly; midstream traders have accelerated inventory turnover, and the market trading activity has increased significantly; downstream tire companies are facing cost pressure, and some companies have started product price adjustment mechanisms.
Market analysis agencies generally believe that the tight balance between natural rubber supply and demand is unlikely to change in the short term, and prices are expected to remain strong, but we need to be vigilant about potential risks brought about by weather changes in producing areas and macroeconomic fluctuations. This delayed price increase is quietly reshaping the natural rubber market.
