Natural Rubber Price Trends and Forecast

Regional Price Overview

Get the latest insights on price movement and trends analysis of Natural Rubber in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Natural Rubber Price Trends for the First Half of 2023

Asia

Mixed price trends were observed for natural rubber in the Asian market. The spot prices went from about 1843 USD/MT in January to around 1651 USD/MT in June in the Chinese domestic market. Inventory and supply levels influenced the price trends amidst stable demands. As the Chinese manufacturing and industrial activities started opening up post-lockdown, supplies increased, supporting the declining price trends.

Europe

European Natural Rubber prices mostly declined during the first half of 2023. The only variation was in the first month, where the FD Spot prices averaged from around 1715 USD/MT (CIF, Europe) to around 1875 USD/MT (CIF, Europe) in February, but soon after, those prices started declining and continued declining till the end of the second quarter. The prices stood at about 1670 USD/MT in June’23. The price trends for natural rubber were influenced by stable demands and high inventories in H1 2023.

North America

The US Natural Rubber market behaved very similarly to the Asian market as the prices mostly remained on a downward trends. As the inventories grew while energy and crude oil prices declined, suppliers had to revise the asked prices as the demands stayed stable and the market experienced reduced momentum. Overall, fluctuating price trends were observed.

Analyst Insight

According to the Procurement Resource, Natural Rubber prices are expected to continue similar fluctuating price trends, as market offtakes will continue to remain volatile.

Natural Rubber Price Trends for the Second Half of 2022

Asia

In the third quarter of 2022, the prices of natural rubber witnessed a gradual decline due to the weak demand from the tire and adhesive industries. The production rates in the region were reduced and as a result, the offtakes declined. In addition to this, the supply remained abundant leading to stockpiling, further aiding the price decline. The fourth quarter was also identical to the previous one in terms of demand. Additionally, crude oil and natural gas prices fell, further contributing to the falling price trends for natural rubber.

Europe

The third quarter was favourable for the natural rubber market as the prices inclined due to stable demand from the tire and adhesive industries. The increased prices of raw materials drove the production costs further aiding the price rise.  However, the fourth quarter did not follow these steps and the prices declined as a result of weak downstream demand. The automotive sector took the biggest hit and with the fall in the prices of crude oil, the price trends of natural rubber struggled to remain afloat in the fourth quarter.

North America

The price trends frequently fluctuated in the North American region as the rise in production and excessive supply declined the prices in August. However, the disruptions in the supply chains and increase in demand resulted in an incline in the prices of natural rubber towards the end of the third quarter. In the fourth quarter, the prices declined gradually as the automotive sector saw sluggish demand and the cost of production along with crude oil and natural gas fell aiding in the declining price trends for natural rubber.

Analyst Insight

According to Procurement Resource, the price trends for Natural Rubber are expected to show a mixed trends in the upcoming quarter given the rise in the momentum of the automotive sector and demand outlook globally.

Natural Rubber Price Trends For the First Half of 2022

Asia

According to ANRPC, the global outlook for natural rubber looks positive for the current year. The price of natural rubber on the Singapore Commodity Exchange- one of the vital international exchanges for rubber, went from 1.97 USD/kg in January 2022 to 2.03 USD/kg in June 2022. The prices peaked in March 2022, averaging 2.12 USD/kg.

The price trends for the commodity were partially mixed in the Indian Domestic market. Despite the strong market demand, the market suffered from many uncertainties in the form of labour shortages, off-tapping season, adverse climate, surging crude oil prices, and delayed shipment of supplies which aggravated the supply tightness in the following months. In March, the futures contract of natural rubber averaged 168.90 INR/kg on Multi Commodity Exchange.

The contract price of SMR 20 – majorly imported by tyre manufacturers, averaged 129.51 INR/kg, and that of Latex averaged 123.44 INR/kg. The futures contract prices (May 2022) of natural rubber averaged 161.69 INR/kg or 13.47 RMB/kg on Shanghai Futures Exchange. For Latex, the price averaged 123 INR/kg, and that of RSS4 averaged 171 INR/kg.

In the Chinese domestic market, natural rubber prices fluctuated a bit. The prices went from 164.41 USD cents/kg in May 2022 to 163.65 USD cents/kg in June 2022. This fall in the prices of the commodity was due to the reduced activity caused by covid-19 restrictions coupled with the plunging confidence of the buyers/traders in the market conditions.

Europe

Owing to the current geopolitical tensions, crude oil prices surged worldwide, causing the costs of synthetic rubber to inflate. These inflated prices raised the demand and consumption of natural rubber in the market, thereby driving its price trends towards the higher end of the scale. There has been a continuous hike in its prices since the start of the current year. Prices of RSS3 grade averaged 181.8 eurocents/kg in January.

North America

During the first half of 2022, the prices of US natural rubber averaged between 2.79 USD/kg to 2.91 USD/kg or 2789.89 USD/MT in New York and Washington DC.

For the Fourth Quarter of 2021

Asia

In November 2021, the natural rubber prices in India were approaching the 200 INR/kg barrier, having reached an eight-year high. The increase was sparked by a severe scarcity, exacerbated by exceptional rains during peak tapping season. The RSS-4 grade which is utilized in the tyre sector was priced at 188 INR/kg, up more than 9% in the last month.

Merchants stated that the market's unofficial prices were somewhere around 192 INR/kg. Heavy rains occurred on top of import bottlenecks and skyrocketing latex prices, all of which occurred during November's prime tapping season. Typically, rubber estates are rain-guarded between April and May. However, it was hurt hard this year by Covid-19's revival and the lockdown. The rain guards, which were erected to endure the Southwest monsoon, proved unsuccessful during October and November's intense rains.

The rubber sector had asked the government to request concessionary imports of the product which the government had not considered. Simultaneously, a container shortage resulted in an increase in freight prices, blocking lucrative imports of the item. However, in November and December, the rate of RSS 4-grade fell to approximately 162 INR/kg.

Natural rubber prices in China were highly dependent on how quickly and effectively China resolved its power supply problems. The dynamics were critical to the market's short-term fundamentals. China utilized 507,000 MT of the commodity in August and 50,000 MT in September, despite the fact that manufacturing activities were hampered by the power supply shortage.

International costs decreased significantly since June. This was primarily due to weak demand from China, the world's largest customer. However, by the second part of October, it was hoped that China's manufacturing industry would resume normal operation, as a result of which worldwide natural rubber prices would begin to climb northward and firm.

Europe

According to data recently released by the SNCP (Syndicat National du Caoutchouc et des Polymères), prices for rubber products continued to rise during the second half of the year. Prices for natural and synthetic base material continued to rise in January, according to the French rubber industry group.

In this market, SNCP's RSS3 grade tracker indicated a year-on-year price recovery to 181.88 EUR cents/kg in January 2022. The RSS3 pricing trends showed a substantial improvement in the first month of Covid-hit 2021, when prices approached the 150 EUR cents/kg barrier, albeit they remained much lower than the above 200 EUR cents/kg prices seen a year ago.

For First, Second and Third Quarters of 2021

Asia

By August 2021, the domestic economy in India had already experienced an acute scarcity of raw materials. The severe Covid crisis in Kerala harmed production even more. Additionally, the increase in latex consumption impacted sheet rubber production, which saw a 25-30% decline in output. Latex was purchased at a high price of 155 INR/kg.

To avoid complications with sheet processing, rubber planters were compelled to switch to latex, although temporarily. In India, the product’s productivity rose 28% year on year to 325,000 MT during the first six months of FY21. Nonetheless, it was unable to keep up with rising spending as the economy recovered from the consequences of the Covid-19 crisis. Between January and August 2021, consumption increased by roughly 45% to 630,000 MT.

Imports were contracted to cover the gap by the struggling tyre industry but were delayed due to an extreme container scarcity and freight rate increases. Additionally, prices remained stable in India due to the following factors such as supply and demand outages caused by lower output in the country's largest producer of the commodity, Kerala, a decline in automobile production due to a semiconductor chip shortage, and increased demand for latex gloves following the COVID-19 pandemic. Numerous producers were exporting rubber as latex rather than turning it into sheets for industry.

Natural rubber prices in China continued to rise in August, owing to China's increased acquisition in huge amounts. They were expected to strengthen further, owing to China's increased imports in significant amounts. Between August and November, China was anticipated to consume approximately 500,000 MT. However, only 115,000 MT of this could be met by domestic production. For the next couple of months, mood in the physical markets was dominated by the imminent arrival of Chinese purchasers into the Asian market for sizable imports.

Europe

Consumption fell considerably in the European region in 2021-2022 as a result of decreasing vehicle production. Nonetheless, a late-year resurgence in both demand and oil prices provided a much-needed boost to the product's values.

North America

Prices remained stable due to low demand. They decreased to 1.74 USD/kg in November 2021, from approximately 2.40 USD/kg in March 2021, a seven-year high. Demand dwindling as a result of lower-than-expected vehicle sales, a result of the semiconductor shortfall, helped keep expenses under control as two-thirds of natural rubber was being used in tyre manufacturing.

Global logistical delays, unexpected rises in ocean freight costs, and an acute scarcity of semiconductors, all weighed on the rebound momentum in a number of critical sectors. Additionally, there were geopolitical concerns, most notably the upheaval in Afghanistan as a result of the US's precipitous exit, which destabilized the markets. Climate and geopolitical concerns drew speculative investors away from risky assets, which had an effect on its futures.

For the Year 2020

Asia

Natural Rubber prices were quoted at 14,722 INR/100 kg in Kottayam, India for 2020. Since April 1, 2020, their price in India have nearly doubled. The spike has been linked primarily to global reasons, most notably China's large volume purchases from the top producer. RSS-4 grade was quoted at 163 INR/kg in Kottayam on December 1, a six-year peak in India.

This increased price was necessary due to Thailand's manufacturing being harmed by new coronavirus-related travel restrictions. The limitations stopped Laotian and Myanmarese rubber tappers from visiting Thai rubber estates. Additionally, trees in South-East Asia had been afflicted by pestalotiopsis, a fungal disease that results in irregular leaf fall. Indian production was reduced in 2020 as a result of growers abandoning the tapping technique.

Europe

Global natural rubber prices increased once more, as exporters targeted the global automobile and other processing plants. Nonetheless, because the pandemic remained uncertain, local exporters were cautious in setting profit objectives for this year. In 2020, France sold natural rubber worth 87 million US dollars to other nations.

As a result, France was listed among the world's top 15 natural rubber exporting countries by value in 2020. Germany's exports were worth 79.2 million US dollars in 2020. This was a nearly 10% reduction from the previous year. Germany remained, nevertheless, one of the top twenty exporters of the product in the world.

North America

90% of the world economy is reliant on Asia for natural rubber supply. For instance, the United States imported natural rubber worth $140 million in March 2020 solely. Travel limitations associated with the COVID-19 outbreak had a significant influence in 2020 on the natural rubber production declines.

It hampered the physical access of migrant labourers from Laos, Myanmar, and other border nations to Thailand and Malaysia's plantations and fields. The harbors in that region were heavily struck by the epidemic, resulting in increased loading / unloading delays, as well as container shortages.

Latin America

Between June 2020 and November 2020, the price of the product climbed from 31.2 MXN/kg to 46.56 MXN/kg. The growing natural rubber prices were attributable to global industries grinding to a halt as a result of the coronavirus epidemic, as well as the resulting demand and supply gap.

Procurement Resource provides latest prices of Natural Rubber. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.