July 31st news
Since late July, the Chinese natural rubber market has been fluctuating and weakening. On one hand, there is weak demand during the off-season, and on the other hand, weather disturbances in the production areas have provided some bottom support for natural rubber, leading to a decrease in natural rubber prices, but the extent of the price decrease is limited. The focus of natural rubber prices has continued to shift downward. Data shows that as of July 31, the spot price of natural rubber in the Chinese market was around 16,483 CNY per ton, down 1.64% from 16,758 CNY per ton on the 21st.
In late July, continuous heavy rainfall and overcast skies in China's production areas significantly reduced the number of effective tapping days, leading to low latex flow efficiency. The monthly output of domestic ribbed smoked sheet (RSS) remained low, making it difficult to provide effective supply to the Chinese spot market in the short term, further increasing China's dependence on overseas sources.
In late July, frequent rainfall in Southeast Asia disrupted tapping, slowing the pace of new rubber entering the overseas market and temporarily easing China's inventory accumulation pressure. The inventory at the Qingdao port increased slightly. Data shows that as of July 26, 2026, the total inventory volume of natural rubber in bonded and general trade in the Qingdao area was 668,100 tons, up 0.1% from the previous period.
The tire industry has entered the traditional maintenance off-season, with the capacity utilization rate continuing to decline. In late July, the operating rate for all-steel tires in Shandong was 62%, and the national operating rate for semi-steel tires was 58%. The finished product inventory days for tire companies exceeded 40 days, with a slow pace of destocking at the terminal level. Companies' willingness to replenish raw materials is low, maintaining a just-in-time procurement model.
Outlook:
From a technical perspective: In mid to late June 2026, the price broke below the 10-day and 20-day moving averages with increased volume, marking a formal trend reversal. The current price is trading below all moving averages, with the 10-day and 20-day moving averages continuously declining, forming strong resistance, and the moving averages are in a bearish alignment. Short-term oversold bounces are likely to be suppressed by the moving averages, limiting the rebound space; without a breakout above the 20-day moving average with increased volume, the weak pattern will be difficult to reverse. Technically, the trend has turned bearish, and it is likely to maintain a weak consolidation in the short term, with the effectiveness of the support below needing continuous validation.
Fundamentally, natural rubber is expected to maintain a weak and volatile pattern in the short term. In early August, tire companies in China will continue their maintenance, and there is no significant momentum for demand recovery, which may lead to a continued weak and volatile trend in rubber prices. The medium- to long-term market trend will primarily depend on the marginal changes in supply and demand. On one hand, it is necessary to monitor the weather conditions in the Southeast Asian production areas to verify the expectation of supply contraction due to El Niño-induced drought. On the other hand, close attention should be paid to the resumption pace of downstream tire production and the strength of the peak season recovery during the "Golden September and Silver October."
