Natural rubber prices have exhibited notable fluctuations in the initial two months of 2025, influenced by a combination of supply limitations and evolving consumption trends. The sector showcases a clear ascending trend despite occasional phases of stabilization.

January began with subdued activity in the natural rubber market as the approaching Spring Festival prompted a slowdown in downstream construction. Trading remained feeble with prices consolidating at lower levels.

The worldwide natural rubber industry is under extraordinary strain due to a combination of elements, including the El Niño weather pattern, aging rubber plantations, and a significant deficit of skilled tappers. These challenges have drastically hindered output in key cultivation areas, pushing natural rubber valuations upward throughout February.

Market experts highlight the strengthened fundamentals of 2024 as a solid base for sustaining current price levels. Global natural rubber output expanded last year, while China's imports declined, and local tire manufacturing rose. This shift established advantageous market conditions for natural rubber price resilience as 2025 commenced.

Production capacity for natural rubber across the Asian rubber-producing countries has totaled approximately 15.57 million tons in 2024. Experts project this capacity will decline in coming years based on the typical seven-year cutting cycle for rubber trees.

Current high prices are already impacting production patterns. Indonesia expects a significant decrease in output for 2025, while regions with younger tree populations such as Thailand, Vietnam, and Côte d'Ivoire foresee production increases. Evenso, natural rubber production appears to have reached its peak.

The post-Festival period has seen domestic Chinese spot prices strengthen considerably. As of February 17, natural rubber prices showed a marked increase from pre-holiday levels, primarily driven by raw material constraints and gradually increasing downstream production.

After the Spring Festival, key production regions in Vietnam and northeastern Thailand entered their cutting suspension period. Chinese production areas likewise remain in suspension, keeping raw material prices firmly elevated. The supply constraints provide substantial support for natural rubber prices despite ongoing inventory accumulation in port areas.

Natural rubber inventories continue to show accumulation patterns. As of February 9, 2025, the Qingdao area held approximately of 569,000 tons of bonded and general trade natural rubber, increasing from the previous reporting period.

Demand has gradually improved since the middle of February. Operating loads for semi-steel tires in domestic tire enterprises hover around 80%, while all-steel tire production in Shandong has increased to approximately 67% capacity.  The natural rubber market outlook remains decidedly bullish. Industry experts foresee that natural rubber prices will remain high throughout 2025, considering the fundamental supply surge and expected demand increases. Weather factors introduce additional uncertainty, potentially exacerbating supply constraints if conditions prove unfavorable.

Natural rubber faces a favorable pricing environment in 2025. The cessation of cutting in key production areas combined with gradually increasing downstream demand creates a strong foundation for prices. High port inventories impose some downward pressure, but natural rubber prices will fluctuate strongly while remaining high in the coming months. Industries relying on natural rubber as a key raw material face significant challenges in procurement strategies and cost management throughout 2025.