Natural Rubber Market Dynamics Report (Recent Updates)

Price Trends
- Spot Price: As of May 22, 2026, the spot price of natural rubber stood at approximately RMB 17,500 per ton, representing a 0.53% increase from RMB 16,408 per ton at the beginning of May, yet down 2.55% from the cycle high of RMB 17,958 per ton. In early May, natural rubber prices continued their upward momentum, approaching the RMB 18,000/ton threshold; however, mid-to-late May saw a shift toward consolidation and correction.
- Futures Price: For the benchmark rubber futures contract, the closing price on May 22 was RMB 17,420.00 per ton, down RMB 95.00 per ton (?0.54%) from the previous trading day. Similar to the spot market, futures prices also exhibited a pattern of rising in early May followed by a decline thereafter.

Supply–Demand Situation
- Supply Side:
- Early in the tapping season, Southeast Asian producing regions—including Thailand—experienced El Ni?o–induced high temperatures and drought, delaying latex collection and tightening raw material supply. Consequently, Thai cup lump rubber prices surged significantly. However, increased rainfall later improved conditions, enabling Thailand, Vietnam, and China’s Hainan and Yunnan provinces to progressively enter full-scale tapping, thereby steadily increasing raw material availability and easing physical market supply.
- Globally, the long-term natural rubber supply cycle is tightening, with output potentially peaking and supply elasticity gradually diminishing. In the medium term, elevated prices incentivize active tapping; however, weather-related disruptions remain substantial—El Ni?o’s delayed effects warrant close attention, alongside seasonal volume pressure and potential diversion of latex into concentrated latex (concentrated latex) production.
- Demand Side:
- The downstream tire industry remains in its traditional off-season. Both full-steel and semi-steel tire plant operating rates are low, overseas orders are insufficient, and manufacturers procure strictly on a just-in-time basis—resulting in weak underlying demand. As of the week ending May 16, domestic semi-steel tire plant operating rates stood at 75%, while full-steel tire plant operating rates in Shandong Province were at 68%.
- Non-tire applications show stable but modest demand, offering little meaningful support. Overall, sluggish tire demand—compounded by elevated input costs—has led to inventory overhang among tire producers, while export order growth remains inadequate.

Inventory Status
- As of May 17, 2026, total natural rubber inventories in Qingdao—including bonded and general trade stocks—reached 603,400 metric tons, up 0.72% week-on-week, reflecting persistent inventory pressure.

Basis and Moving Averages
- Basis: Throughout late April, the natural rubber basis remained persistently negative, reaching a low of ?RMB 181.67 per ton on April 30—indicating that futures prices significantly exceeded spot prices and signaling bullish market sentiment regarding future fundamentals. In early May, the basis rapidly recovered: by May 8, it had turned positive at +RMB 11.67 per ton (i.e., a slight premium), reaching a level near the highest point in the past year—suggesting constrained upside potential for near-term futures prices.
- Moving Averages: Technically, the 10-day, 20-day, 30-day, and 60-day moving averages remain clearly aligned in an upward (bullish) configuration, indicating that the medium-to-longer-term uptrend remains intact. However, on May 8, the spread between the 10-day and 20-day moving averages stood at RMB 249.16 per ton—and shifted from widening to narrowing, implying weakening short-term upward momentum. Since mid-May, this spread has continued declining and currently stands near RMB 40 per ton, reflecting price reversion toward its moving average and a notable attenuation of prior bullish impetus.

Analysis & Outlook
- Short Term: Natural rubber is expected to trade in a weak, range-bound manner. Seasonal supply expansion continues to weigh on prices; demand remains subdued due to seasonal weakness; and elevated inventory levels further dampen sentiment. Although longer-term moving averages retain a bullish alignment, fading short-term momentum—evidenced by contracting moving-average spreads and a high basis—collectively signal limited near-term upside potential.
- Medium Term: A rebound could occur if supply falls short of expectations or if demand shows marginal improvement. However, current evidence suggests no clear signs of demand recovery. While supply remains subject to weather-related volatility, the overall trend points toward steady seasonal increases—thus limiting both the magnitude and sustainability of any medium-term rally.
- Long Term: The global natural rubber supply cycle is tightening, with production likely approaching its peak and supply elasticity continuing to erode. Coupled with relatively stable demand growth, these structural dynamics may provide a fundamental underpinning for higher long-term prices. Nevertheless, heightened seasonal and cyclical volatility—driven by weather anomalies and macroeconomic policy shifts—increases price uncertainty.

Forecast
- Price Range: In the near term, natural rubber prices are likely to fluctuate weakly within the RMB 17,000–17,500 per ton range, with strong support expected near RMB 17,000 per ton.
- Trend Outlook: Absent major supply disruptions or unexpectedly robust demand growth, natural rubber prices are unlikely to breach previous highs in the immediate term and will likely remain range-bound with a mild bearish bias. Over the medium term, key watchpoints include seasonal supply ramp-up in producing regions and evolving demand resilience. Should demand exhibit even modest improvement, a tactical rebound is possible; conversely, sustained supply growth without commensurate demand recovery may lead to further downside pressure. Over the longer horizon, structural supply tightening and steady demand growth suggest a gradual upward price trajectory—though this path will be subject to frequent interruptions from exogenous factors.