In 2026, the natural rubber market is characterized by contracting supply, rising costs and prices fluctuating at high levels. The combination of weather disruptions and ageing rubber trees in Southeast Asian producing regions has led to tight global supply and an optimized export structure. Prices continue to strengthen amid the interplay between supply and demand, making natural rubber one of the more buoyant commodities.

Export Data: Slight Increase in Imports, Optimized Export Structure

Customs data shows that in the first quarter of 2026, China’s imports of natural rubber (including latex) stood at 2.191 million tons, a slight year-on-year increase of 0.4%; In March alone, imports reached 787,000 tons, a year-on-year increase of 3.6%. On the export front, the value of rubber-related product exports rose year-on-year in the first quarter, with latex products and tires performing particularly well. Exports to regions such as Southeast Asia and the Middle East saw significant growth, increasing by approximately 8%–12% compared to the same period in 2025, with resilient overseas demand supporting the steady expansion of export volumes.

As the leading producer, Thailand exported 450,000 tons of natural rubber in the first two months, a year-on-year decrease of 15%, with exports to China falling by 23%, leading to a restructuring of global supply flows.

Production capacity since April: Weather disruptions compounded by long-term contraction limit supply growth

Since April, the release of global natural rubber production capacity has been hampered by a combination of short-term disruptions and long-term contraction. Persistent high temperatures and drought in the main production areas of Southeast Asia, coupled with low rainfall in northern and north-eastern Thailand, have delayed the start of tapping. In China, the resumption rate in Yunnan’s production areas was only 50% by mid-April, whilst latex output in Hainan has been slow, with temporary suspension of tapping affecting production. In the long term, global natural rubber production capacity has entered a contraction cycle, with 2025 marking the peak. From 2026 onwards, issues such as ageing rubber trees and labor shortages in Southeast Asia will become more pronounced, leading to a gradual decline in production in countries such as Thailand and Indonesia. Although Côte d’Ivoire in Africa is expanding its production capacity, the increase is limited and cannot offset the reduction in Southeast Asia, resulting in a global supply shortfall of approximately 400,000 tons.

Price Trend: Volatile Uptrend, Benchmark Price Hits Year-to-Date High

Natural rubber prices have trended upwards with volatility throughout 2026, with a cumulative increase of over 15% year-to-date. Prices continued to strengthen in April, rising by 3.52% from the start of the month to the 27th; on 8 May, the SunSirs natural rubber benchmark price reached RMB17,858.33 per ton, up 2.58% from the start of May, setting a new high for the year.

The core drivers of price fluctuations are tight supply and cost support. Drought has led to higher prices for raw latex, with Thai latex quoted at 845 baht per kg—a recent high—which has bolstered spot prices and strengthened traders’ resolve to maintain prices.

Global supply landscape: Southeast Asia’s dominance wanes, Africa’s share rises

The global natural rubber supply landscape is characterized by a ‘contraction in Southeast Asia and the rise of Africa’. Southeast Asia accounts for over 70% of global production, with Thailand, Indonesia and Vietnam as the core producing regions; however, production capacity continues to shrink due to ageing rubber trees, weather-related disasters and labor shortages. Thailand’s output in the first quarter of 2026 fell year-on-year, Indonesia’s production decline is evident, and Vietnam’s exports have become more volatile due to policy disruptions. Côte d’Ivoire in Africa has become the third-largest rubber-producing country, exporting 483,700 tons in the first quarter of 2026, a year-on-year increase of 1.1%. Its low-cost advantage is driving capacity expansion, leading to a gradual decentralization of global supply concentration.

Upstream and Downstream: Strong raw material prices underpin rubber prices, whilst downstream costs face pressure

Upstream raw material prices continue to rise, with Thai latex and cup prices increasing month-on-month. Drought has led to tight raw material supplies, providing strong support for natural rubber prices from the cost side. In downstream applications, the tire industry accounts for over 70% of demand. Tire manufacturers are maintaining high operating rates with stable essential demand; however, rising natural rubber prices have increased production costs, squeezing profit margins for some small and medium-sized enterprises. Consequently, tyre prices have been adjusted upwards, passing cost pressures down the supply chain. Industries such as latex products and footwear are also facing rising cost pressures, with procurement driven primarily by essential demand.

Future Outlook: Tight Supply-Demand Balance to Persist, Prices Likely to Rise but Unlikely to Fall

Looking ahead, the tight supply-demand balance in the natural rubber market is unlikely to be broken in 2026, with prices expected to remain at elevated levels and fluctuate, whilst retaining room for further upward movement. On the supply side, weather disruptions in Southeast Asia persist, and with El Niño expectations intensifying, the tapping process may be hindered; the long-term trend of capacity contraction is clear, with limited new capacity additions, thereby constraining supply growth. On the demand side, stable essential demand for domestic tires and latex products, coupled with the resilience of overseas export markets, is underpinning price strength. On the cost side, with raw material prices remaining at elevated levels and the industry’s determination to maintain prices, natural rubber prices are more likely to rise than fall. In the medium to long term, the global supply-demand gap is set to persist in 2026, with the price benchmark rising steadily and high-level trading becoming the market norm.

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