September 20th report:
Since September, the natural rubber market in China has experienced a trend of first rising then falling, with fluctuating prices within a range. Data shows that as of September 20, the price of natural rubber in China was around 18,150 CNY/ton, an increase of 0.14% from 18,125 CNY/ton at the beginning of the month. During this period, the highest price reached 18,866 CNY/ton. The main futures contract for natural rubber on the Shanghai Futures Exchange touched a high of 19,810 CNY/ton, reaching a new high in nearly two years, before falling back to around 18,670 CNY/ton, with intense competition between long and short positions.
Supply-side support remains relatively strong:
ANRPC forecasts that global natural rubber production will reach 15.32 million tons and consumption will total 15.60 million tons in 2026, resulting in an annual supply–demand deficit of 280,000 tons.
Southeast Asia is currently in its peak production season, but persistent rainfall is disrupting tapping operations. Coupled with aging rubber trees in Thailand and rubber diseases in Indonesia, raw material supply has fallen short of expectations.
Port inventory continues to decrease. As of September 13, the total inventory in the Qingdao Free Trade Zone and general trade was 603,200 tons, a reduction of 15,800 tons from the previous period, continuing a slow destocking trend. China's spot inventory is low. Meanwhile, the price of butadiene has risen, increasing the cost of synthetic rubber, leading to an increase in substitute purchases downstream, which further supports rubber prices.
Demand is putting downward pressure on the pace of price increases. As of September 11, China’s semi‑steel tire utilization rate stood at 65.53%, down 7.93% year over year, while the all‑steel tire utilization rate was 63.53%, a 2.06% decline from the same period last year. Inventory turnover for semi‑steel tires was 44.7 days, and for all‑steel tires, 36.4 days, reflecting weak end‑user demand in both commercial and passenger vehicles. Despite tire manufacturers’ widespread announcements of price hikes—ranging from 2% to 5%—high raw material costs are squeezing margins, prompting plants to adopt only rigid‑demand procurement and limiting their willingness to proactively replenish inventories, resulting in a weaker-than-expected peak-season performance.
Outlook:
From a technical perspective: The current spot price of natural rubber has fallen below the 5-day moving average, indicating a weakening of short-term bullish momentum; however, the 10-day and 20-day moving averages are still trending upwards, suggesting that the medium-term trend remains relatively strong. In the short term, the market is in a phase of retracing from a high level, with attention on the support at the 20-day moving average. If this moving average holds, the market is likely to consolidate at a high level; if it is effectively breached, further downward pressure will be released. Overall, the short-term trend has weakened, but the medium-term upward structure has not been completely disrupted.
From a fundamental perspective, natural rubber is expected to maintain a high-range fluctuation in the short term. The supply side is nearing the end of the peak production season, with expectations of reduced output increasing, and Thai cup rubber at 74.2 Thai baht per kilogram provides cost support. On the demand side, there is unlikely to be any significant improvement in the short term, as increased tire maintenance suppresses purchasing. Additionally, macroeconomic and geopolitical factors add to the disturbance. In summary, there is considerable upward pressure on rubber prices, but there is also cost support, making it difficult for a significant one-sided market trend to emerge in the short term.
