Laem Chabang, Thailand: In November 2024, the Natural Rubber (TSR) market experienced a bearish trend due to weak demand from China, the major importing nation, and resistance from market players against the high prices of the commodity. This combination of reduced demand from the major consumer and price sensitivity led to a downward pressure on the market, reflecting broader economic and supply chain challenges.

In November 2024, the Natural Rubber market in Thailand witnessed a 3.5% decline, with prices settling at USD 1935/MT (FOB-Laem Chabang). Early in the month, favorable weather conditions in key production areas improved, leading to an increased supply of raw materials from both domestic and foreign sources. This abundance caused a fall in raw material prices. Although heavy rain towards the end of November hampered the rubber-cutting process, the overall supply remained sufficient. Furthermore, the downward trend in Butadiene Rubber prices reinforced bearish sentiments in the Natural Rubber market, contributing to the price decline observed.

In addition, as per the news from Thailand on November 18, the Rubber Authority of Thailand (RAOT) has officially initiated the "Rubber Delayed Sales" project for the fiscal year 2025. This initiative aims to manage the rubber supply in the market and stabilize prices, ensuring that rubber farmers can maintain a good standard of living.

The decline in Natural Rubber prices is primarily attributed to the waning demand from China, the major consumer of the commodity. In China, recently, raw material prices have fluctuated, and domestic stocks of Natural Rubber have been increasing. Downstream rubber tire factories are stocking up based on current demand to support their needs but are showing resistance to high-priced supplies, causing the Natural Rubber market to consolidate within a high range. As of November 24, 2024, the total bonded and general trade stocks of Natural Rubber in Qingdao remained stable at 423,500 tons, the same as the previous period. This inventory level indicates a potential imbalance in supply and demand, affecting market dynamics.

Furthermore, the European Parliament's decision to postpone the implementation of the EU Deforestation Regulation (EUDR) by one year, initially set to take effect on December 30, 2024, to December 30, 2025, for large companies, and June 30, 2026 for micro and small enterprises, was influenced by lobbying efforts from businesses and governments worldwide. This postponement was intended to allow companies more time to adopt the rules effectively, ensuring that the law's objectives are not compromised. While this delay could have potentially boosted the demand for Natural Rubber from European nations, the market experienced a moderation as participants exhibited cautious behavior, limiting their demand for Natural Rubber. This cautious approach further contributed to the bearish trend observed in the Natural Rubber market, highlighting the complex interplay between regulatory changes and market dynamics.

As per ChemAnalyst, the Natural Rubber market is expected to see an upward trend in the coming months due to the anticipation of insufficient inventory levels, as heavy rainfall in Thailand's key production areas has disrupted the rubber tapping process. Mr. Suktat Sangwiriyakul, Acting Director of the Rubber Authority of Thailand, highlighted that severe flooding in provinces like Songkhla, Satun, Pattani, Yala, and Narathiwat has damaged over 5 million rai of rubber plantations, leading to a potential shortage in rubber production. This disruption is anticipated to affect the supply chain, causing a rise in Natural Rubber prices as the market adjusts to the reduced supply.