Since July 2026, the natural rubber market has undergone a period of volatile consolidation. As of July 21, the spot price for natural rubber in my country stood at approximately 16,758 RMB/tonne, a 0.20% decline from the 16,791 RMB/tonne recorded at the beginning of the month; the market trend was characterized primarily by fluctuation and consolidation during this period.
On the supply side, increased production during the peak season is being offset by weather-related disruptions. Southeast Asia has entered its peak tapping season; as of July 21, natural rubber latex in Thai producing regions was quoted at 78.00 THB/kg and cup lump at 70.50 THB/kg—increases of over 40% year-on-year—providing a floor for raw material costs. However, intermittent rainfall in major producing regions has disrupted tapping operations, temporarily curbing the release of new rubber supplies. ANRPC data indicates that global natural rubber production in May totaled 997,000 tonnes, down 4.7% year-on-year; a slight supply-demand deficit is expected for the full year, alongside persistent long-term bullish expectations driven by El Niño.
On the demand side, seasonal slackness is significantly capping upside potential. As of July 16, the operating rate for domestic semi-steel tires stood at 60%, while the operating load for all-steel tires at Shandong tire enterprises was 62%. Rotating maintenance and production controls/reductions are widespread, and finished tire inventories in Shandong exceed 40 days of supply; factories are purchasing only to meet immediate needs, with little willingness to actively restock. While rising crude oil prices have driven up synthetic rubber costs—thereby slightly improving the price competitiveness of natural rubber—export orders remain suppressed by the EU's anti-dumping policies.
Inventory levels have seen a slight decline but remain relatively high. As of July 19, 2026, combined bonded and general trade natural rubber inventories in the Qingdao area totaled 667,400 tonnes, a decrease of 1,900 tonnes from the previous period. The pace of destocking is slow, making it difficult to reverse the market's loose supply-demand balance.
Market Outlook: Fundamentally, natural rubber prices are expected to fluctuate within a range in the short term. If persistent rainfall in Southeast Asia continues to disrupt tapping, there may be room for a slight rebound; conversely, if weather conditions in producing regions improve and new rubber supplies hit the market in volume, prices will likely face downward pressure. In the medium term, operating rates are expected to rebound following the completion of downstream maintenance in August; coupled with consumption expectations for the "Golden September and Silver October" peak season, rubber prices may see a moderate upward shift.
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