News and Articles

• Natural rubber benchmark hits RMB 17,858/tonne in early May
• Year-to-date gains exceed 15%, projected 400,000-tonne deficit in 2026
• Aging plantations and weather disruption tighten Thai and Indonesian output
• Geely targets 640,000 overseas vehicle sales, lifting tyre demand
• Higher crude oil prices push synthetic rubber costs, supporting natural grades

Natural rubber prices have climbed steadily through 2026 and reached fresh yearly highs in May, with the Chinese benchmark touching RMB 17,858.33 per tonne on May 8 and holding firm into the third week of the month. The cumulative year-to-date gain now exceeds 15%, placing rubber among the better-performing soft commodities of the year. April alone delivered a 3.52% rise from month-start to April 27, and prices have continued to firm despite intermittent profit-taking.

The supply story is structural. Plantations across Thailand, Indonesia, Malaysia, and Vietnam, which together account for nearly 80% of global natural rubber output, are dealing with aging trees that have passed peak yield, alongside weather disruptions that have shortened tapping windows. Early 2026 estimates point to a global supply deficit of around 400,000 tonnes, with seasonal low output between February and May further squeezing physical availability ahead of the June-September peak. Thai natural rubber STR20 prices have traded in a wide $1,650 to $2,160 per tonne range over the past year, reflecting the volatility.

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Demand has stayed firm enough to support the rally. Tyre manufacturing remains the dominant consumer, and Asian auto production has held up better than expected. Geely alone is targeting 640,000 overseas vehicle sales in 2026, a 50% jump from last year. Latex goods, medical glove producers, and industrial rubber users have added to baseline pull. Higher oil prices have lifted synthetic rubber costs, since synthetic grades are petroleum-derived, narrowing the price gap that would normally allow tyre makers to substitute away from natural rubber.

Cost-side support is also building. Smallholder raw material prices have stayed elevated, and processors in Southeast Asia have been unwilling to discount in the face of strong export bids from China, India, and Europe. Indian importers paid roughly $202 million for Thai natural rubber in 2024, and 2025 inflows ran higher. Indonesia continues to ship around $13.85 million in natural rubber to Thailand annually for blending and re-export.

For procurement teams in tyre manufacturing, footwear, gloves, and industrial belting, the price floor looks firm into the third quarter. Buyers should accelerate forward cover for July through October shipments, lock in TSR20 and RSS3 reference contracts where possible, and review formula-pricing clauses tied to SICOM benchmarks. Hedging through TOCOM or SHFE futures has become more attractive given the persistent backwardation in some grades. Substitution toward synthetic rubber offers limited relief while crude oil holds above $80 per barrel.