Tire Raw Materials Market Diverges
Market data from December 24, 2025, shows that prices of major tire raw materials are diverging, with the interplay of bullish and bearish factors leading to differentiated market patterns for various products. Regarding natural rubber, the escalating geopolitical tensions between Thailand and Cambodia are a key disruptive factor on the supply side.
This friction is concentrated in the core rubber-growing region of northeastern Thailand, forcing rubber mills within 200 kilometers of the border to shut down. This has directly resulted in a decline in Thailand's December output during the current peak production season, and significant uncertainty remains regarding subsequent supply release.
Meanwhile, the pace of rubber tapping cessation in domestic production areas is accelerating. Yunnan has already completely stopped tapping, and Hainan is gradually entering a cessation phase. Data from Longzhong Information shows that as of the week ending December 25, domestic weekly natural rubber production was only 5,000 tons, a slight decrease compared to the previous week.
It is expected that domestic production areas will achieve a complete cessation of tapping in the next cycle, further highlighting the supply contraction trend and providing solid support for rubber prices.
However, weak demand and inventory pressure are significantly constraining the upward movement of rubber prices. The domestic tire industry is currently in its seasonal off-season, with end-user procurement primarily driven by rigid demand, making it difficult to generate incremental growth. Coupled with year-end pressure to recoup funds, market activity remains low.
Regarding inventory, although there are expectations of reduced overseas shipments arriving at ports, potentially easing the accumulation of inventory, the current high inventory levels remain fundamentally unchanged, continuing to suppress rubber prices.
Amidst the intense interplay of bullish and bearish factors, natural rubber is expected to maintain a wide range of fluctuations in the short term. Analysts at Longzhong Information predict that the spot price of full-latex rubber in the Shanghai market will likely range between 15,100 and 15,400 yuan/ton.
The synthetic rubber sector is showing a structural recovery, with prices continuing to rise. The strong performance of the core raw material butadiene market is a significant driver. According to data from Business Society, the domestic butadiene market price rose from 6,983.33 yuan/ton in December 2025 to 8,012.5 yuan/ton, a monthly increase of 13.85%. Despite ample overall butadiene supply, a temporary maintenance shutdown at Dongming Petrochemical's plant in the latter half of the month reduced supply in some areas. Coupled with price increases from major manufacturers, market sentiment turned bullish.
Boosted by rising costs and improved supply-demand dynamics, prices of related rubber types also strengthened. The butadiene rubber market saw a volatile upward trend, with prices in East China rising 4.03% from the beginning of the month to the end, further fueling speculation in the synthetic rubber market.
However, weak end-user demand continued to constrain the upward trend. Low operating rates in the tire industry limited downstream activity, hindering high-price transactions. Therefore, styrene-butadiene rubber prices are expected to fluctuate within a narrow range, unlikely to form a sustained one-sided upward trend.
The carbon black market continued its downward trend, with the transmission of negative factors from the raw material side being the dominant factor. The recent continuous decline in raw material coal tar prices directly eased the production cost pressure on carbon black enterprises, but also created a sustained negative impact.
As a result, carbon black companies are generally operating at a loss, and their profit margins have narrowed significantly. However, the imbalance between supply and demand in the market remains unchanged, and the focus of new order negotiations continues to decline.
Downstream tire companies mostly adhere to a just-in-time purchasing strategy, concentrating their willingness to accept low-priced goods, which further exacerbates the weak market atmosphere. In the short term, the carbon black market is unlikely to have any substantial momentum for recovery.
