Tire Industry Rubber Demand
On December 5th, the natural rubber market exhibited a volatile pattern of "futures slightly rising, spot prices stabilizing." In the futures market, the Shanghai Futures Exchange's main rubber contract (RU2605) opened at 15065 yuan/ton, reaching a high of 15110 yuan/ton during the session.
As of 10:01 AM, it was trading at 15075 yuan/ton, up 40 yuan/ton from the previous trading day's closing price, a gain of 0.27%. All longer-term contracts also saw slight increases, with the rubber 2608 contract rising by 0.40%, indicating some support from market expectations regarding future costs.
Spot market prices remained relatively firm. Yunnan SCR-5# spot prices were quoted at 14900 yuan/ton, while SCR-10# spot prices in Kunming, Jinghong, and other producing areas, as well as imported from Thailand and Vietnam, remained at 13800 yuan/ton.
The price of Thai standard rubber in the Qingdao bonded area is $1835/ton, while the domestic mixed rubber price range remains stable between 14500-15300 yuan/ton, a slight increase of 75-150 yuan/ton compared to the previous two days.
It is worth noting that the main contract has tested the psychological support level of 15000 yuan/ton twice this month, reaching a low of 14910 yuan/ton, indicating continued downward pressure in the short term.
(I) Supply Side: Peak Season Increases Suppress Price Elasticity
The continued release of global supply pressure has become the main suppressive factor in the market. Global natural rubber production reached 1.496 million tons in October, a month-on-month increase of 1.7% and a year-on-year increase of 2.7%, the second highest this year.
Despite the accelerated cessation of rubber tapping in Yunnan, China, leading to a gradual decrease in new rubber production, the supply recovery in major overseas producing areas has exceeded expectations: the impact of floods in southern Thailand was limited (resulting in a production reduction of only 10,000 tons), and with reduced rainfall, tapping and logistics have resumed, with December production expected to increase by more than 5% month-on-month; although Indonesia and Vietnam saw a 9.8% and 1.3% year-on-year decrease in annual production due to adjustments in planting structures, short-term supply is sufficient during the peak production cycle in the fourth quarter.
Weakening raw material cost support, the price of Thai cup rubber remained stable at 49.93 baht/kg, a 3.2% decrease from the November high, further weakening the bottom support for rubber prices.
(II) Demand Side: Failed Peak Season in the Tire Industry Becomes a Key Weakness
As the main consumer of natural rubber (accounting for over 70%), weak demand in the tire industry directly constrains price recovery. The domestic end-market performance was sluggish, with passenger car retail sales down 7% year-on-year in November, and tire companies' finished product inventory turnover days rising to 45 days, an increase of 8 days compared to the same period last year.
While production is supported by profits (pre-tax gross profit of RMB 15.85 per tire for all-steel tires, turning a profit year-on-year), companies are adopting a conservative purchasing strategy, focusing on small-order replenishment and buying only when necessary.
Natural rubber inventories at tire factories in Shandong province remain at the 15-20 day safety line, a decrease of 3 days compared to the third quarter. The export market is also under pressure, with overseas orders fulfilled before Christmas in December. Although the European automotive industry sentiment index has marginally improved to -29.7 points, this has not yet translated into substantial demand growth.
In the short term, the supply contraction caused by the domestic off-season and the increased overseas demand will create a tug-of-war, and rubber prices are likely to remain within the RMB 14,900-15,200 per ton range.
In the medium to long term, two major variables need to be monitored: first, the weather in Southeast Asian producing regions in January 2026 (El Niño warnings may affect production); and second, the effect of pre-Chinese New Year car sales promotions on tire demand in China.
ANRPC predicts that the global natural rubber supply-demand gap will reach 700,000 tons in 2025, but the short-term oversupply situation is unlikely to change. Tire companies can focus on tracking passenger car sales data in mid-December as a core indicator for judging the recovery of demand.
