High-level Fluctuations, Weakening Momentum for Increase: May 2026 Natural Rubber Market Analysis in China

May 9th News

In early May 2026, the spot price of natural rubber, after months of continuous increase, entered a phase of high-level fluctuation. Through a comprehensive analysis of the spot price, moving average trends, basis, and historical cycle data, the current natural rubber market in China is characterized by "high prices, weakening upward momentum, and intensified fundamental competition," with initial signals of a market turning point already appearing.

I. Price Trends: Prices Stabilize at High Levels, with Marginal Slowdown in Upward Momentum

From the Spotcom price data, natural rubber prices have been on a clear upward trend since the beginning of 2026. As of May 8, 2026, the spot price of natural rubber is 17,841.67 CNY/ton, with a significant price increase for the year, and it is in the absolute high range of the past year (the one-year position is shown as "high", with the highest value of the year being 17,858.33 CNY/ton, and the current price is just a step away from the historical high).

On May 8, the average difference between the 10-day moving average and the 20-day moving average was 249.16 CNY/ton, shifting from a widening positive gap to a narrowing one. This indicates that short-term upward momentum is weakening, and the pace of price increases is beginning to slow down.

From May 4 to May 5 previously, the spread between the two averages had repeatedly “narrowed and then widened again,” indicating intensifying bullish-bearish competition and signaling that the consistency of the upward trend is being undermined.

II. Basis Analysis: The Spot-Futures Pattern Reverses, and Market Sentiment Becomes Divided

The basis (spot price - main futures contract price) is a key indicator for assessing the relationship between the spot and futures markets. Recent changes in the natural rubber basis in China reflect an important shift in market sentiment.

After entering May, the basis rapidly recovered. As of May 8, the basis stood at 11.67 CNY/ton, shifting from a discount to a slight premium and reaching a high level seen over the past year. This rapid recovery in the basis reflects, on the one hand, strong support from spot market transactions at elevated prices, and on the other hand, indicates that the upward momentum in the futures market has begun to wane, leading to diverging optimism between the spot and futures markets.

The high operation of the basis also means that the space for further significant increases in short-term futures prices has been compressed. The market has shifted from a pattern where "futures drive up spot prices" to a stage where spot prices stabilize at high levels and futures fluctuate in tandem.

III. Historical Cycles vs. Annual Comparisons: High Levels at Nearly the Highest Point in the Past Decade for the Same Period

From the annual price comparison data, the natural rubber price trend in 2026 has shown a significant difference from previous years:

(Image source: SpotCommodity)

In early May 2026, the price of natural rubber reached 17,841.67 CNY per ton, significantly higher than the price levels in the same period from 2017 to 2025 (14,408.33 CNY per ton in the same period of 2025, 13,630.00 CNY per ton in 2024, and 11,660.00 CNY per ton in 2023), reaching the highest level in the same period over the past decade in China.

From a seasonal perspective, natural rubber typically enters the peak tapping season in the second quarter, and supply-side pressure should gradually increase, making it easy for prices to experience a seasonal correction. However, the market trend in 2026 has clearly broken the traditional seasonal pattern, indicating that the current price support comes more from special macroeconomic, demand, or supply variables rather than the traditional supply-demand balance. Historical data shows that after natural rubber prices break through previous highs, they often enter a phase of high-level fluctuation rather than a continuous one-sided rise. The current high price range means that the resistance to further increases is significantly higher, and the risk of volatility is also amplified.

IV. The Core Contradiction: A Two-Way Game Between Support and Pressure

(1) Supporting factors remain in place, making it difficult for prices to fall rapidly from their current high levels.

Supply-side disruptions persist: Uncertainty factors such as weather and policies in major global producing countries continue to serve as important supports for natural rubber prices. The progress of tapping in Southeast Asia’s key production regions, the efficiency of latex production, and changes in export policies could all disrupt short-term supply and provide support for spot prices.

Downstream demand remains resilient: The operating rates of downstream industries such as tires remain at a high level, providing some support for the rigid demand for natural rubber. The spot market transactions have not shown a significant decline, making it difficult for prices to plummet sharply.

Medium- and long-term moving averages provide strong support: The 20-day, 30-day, and 60-day moving averages remain in a clear upward trend, providing robust support for prices. The short-term trend has not yet fully reversed.

(2) Pressure factors are gradually accumulating, limiting room for further increases.

Diminishing upward momentum: The average deviation of moving averages has shifted from widening to narrowing, slowing the pace of price increases. The driving force behind bullish capital is weakening, and the market lacks new catalysts for further gains. Seasonal supply pressure is approaching: As major producing regions in Southeast Asia enter the full tapping season, natural rubber supply will gradually increase. This marginal shift in the supply-demand balance could put downward pressure on prices.

Profit-taking pressure at higher levels: Natural rubber prices have been rising for several months in a row, accumulating a large number of long positions with realized profits. Once negative market signals emerge, this could trigger concentrated profit-taking, thereby intensifying price fluctuations.

Basis repair at high levels is complete: The basis has shifted from a discount to a premium, and the pull effect of the futures market on the spot market has disappeared. Optimism in the futures and spot markets has diverged, and there is insufficient momentum for further increases.

V. Market Outlook

The current natural rubber market has entered a phase of high-level contention. In the short term, prices are likely to remain in a high-range trading pattern with limited room for further increases, while the risk of pullbacks is gradually rising. The narrowing of moving average deviations, the elevated basis levels, and the approaching seasonal supply pressures all suggest that a turning point in the market may be forming. If prices fail to break through the previous high of 17,858.33 CNY per ton, they will most likely enter a phase of volatile decline. Support below can be closely watched around the 20-day moving average at approximately 17,000 CNY per ton.