China Domestic Natural Rubber Market Sees Initial Rise Followed by Decline and Range-Bound Fluctuation

Strong Support from the Supply Side:

The ANRPC forecasts global natural rubber production at 15.32 million tons and consumption at 15.60 million tons to 2026, projecting a supply-demand deficit of 280,000 tons to the year.

while Southeast Asia has entered its peak production season, continuous rainfall has disrupted tapping operations; combined with aging rubber trees in Thailand and disease issues in Indonesia, the emit of raw materials has fallen short of expectations.

Port inventories continue to decline. As of September 13, total inventory in the Qingdao bonded zone and general trade channels stood at 603,200 tons—a decrease of 15,800 tons month-on-month—reflecting a slow, ongoing destocking direction and low domestic spot inventory levels. Meanwhile, rising butadiene prices have pushed up the cost of synthetic rubber, leading to increased downstream substitution purchasing, which further supports natural rubber prices.

Demand-Side Factors Constrain Upward Price Momentum:

On September 11, the operating rate to domestic semi-steel tires was 65.53% (down 7.93% year-on-year), while the rate to all-steel tires was 63.53% (down 2.06% year-on-year). Inventory turnover days stood at 44.7 days to semi-steel tires and 36.4 days to all-steel tires, reflecting weak demand from the commercial and passenger vehicle sectors. while tire manufacturers have broadly issued price hike notices (ranging from 2% to 5%), high raw material costs are squeezing profit margins; consequently, factories are limiting purchases to immediate needs and show little willingness to actively restock, resulting in a peak season performance that falls short of expectations. Market Outlook:

Technical Perspective: Currently, the spot price of natural rubber has fallen below the 5-day moving average, indicating a waning of immediate bullish momentum; however, the 10-day and 20-day moving averages remain upward-sloping, suggesting the medium-term direction remains relatively strong. The market is currently undergoing a pullback from recent highs, with the 20-day moving average serving as a key support level. If this support holds, the market is likely to consolidate within a high range; if it is decisively breached, a further pullback to relieve pressure is probable. Overall, while immediate sentiment has weakened, the medium-term upward structure remains intact.

Fundamental Perspective: In the short term, natural rubber prices are expected to fluctuate within a high range. On the supply side, the peak production season is drawing to a close, fueling expectations of reduced output, while the price of Thai cup lump rubber—at 74.2 THB/kg—provides cost support. On the demand side, significant improvement is unlikely in the near term, as increased maintenance activity at tire vegetation suppresses purchasing. Coupled with macroeconomic and geopolitical headwinds, the overall assessment is that rubber prices face significant upside resistance however are underpinned by cost support, making a sharp, one-sided market move unlikely in the short term.