The Natural Rubber (TSR) market witnessed bullishness in its trend during February 2025. This surge can be attributed to the decline in the global supply of Natural Rubber amid steady demand from the domestic as well as the overseas markets. During this month, the major production areas entered a shutdown period. Vietnam completely halted the harvesting process and about 50-60% of the northeastern and southern regions of Thailand also suspended the operations. Therefore, this has resulted in insufficient inventory levels of natural rubber pushing market sentiments upwards.

Key Takeaways-

• The Global Natural Rubber (TSR) market is experiencing bullishness driven by tight supply.
• Major production regions enter the wintering season until May, impacting the production of Natural Rubber.
• The Meteorological Agency of Thailand notified farmers of the potential thunderstorm.

The major natural rubber production areas are currently under the wintering season. This has resulted in low production of the commodity till May. Furthermore, the tight supply situation and the consistent demand for Natural Rubber from the domestic as well as the overseas markets further provided support to the bullishness. Moreover, post-holiday period, the demand for the commodity from the major importing nation, China witnessed an incline driven by a surge in downstream tire production. However, at the end of the month, there was a surge in the inventory levels. As of February 23, the inventory levels in China witnessed a slight incline of 7,000 tons in comparison to the previous period. Despite this, the Natural Rubber market sentiments remained bullish amid the global supply tightening along with the rising demand from the other importing nations amid the low production period.

In China, from mid to late February, the downstream tire sector witnessed a surge in production which resulted in the increased demand for Natural Rubber. As of February 20, the operating rate of the production of semi-steel tires is about 80%, and in the Shandong region as well, it witnessed a slight incline and reached a production capacity of around 67%.

In addition, the Meteorological Agency of Thailand has notified farmers to prepare themselves for the potential crop damage due to the anticipated thunderstorms in the south between March 6 and 8. Therefore, reflecting the weather concerns along with the supply tightening, the market players raised their ex-quotations, resulting in bullish market sentiments.

As per ChemAnalyst, the Natural Rubber market is anticipated to witness bullishness in its trend in the upcoming months due to the tight supply and consistent demand from the domestic as well as the overseas downstream automotive and tire sectors. This supply tightening is expected to support the high prices of Natural Rubber until the peak harvesting season which lasts until September in the major production areas.