Rubber Futures at 1-Week High

Rubber futures rose further to surpass 200 US cents per kilogram, the highest since early March, partly driven by higher oil prices amid uncertainty over a potential de-escalation of the Middle East conflict. Moreover, tight naphtha supplies have curtailed butadiene production, pushing up synthetic rubber prices and supporting demand for natural rubber as an alternative. Seasonal low output in major Southeast Asian producers from February to May further supports prices ahead of the June–September harvest.

Rubber prices dropped below 190 US cents per kilogram, their weakest since early February, pressured by a stronger dollar and fading supply concerns. Attention now turns to the April–May harvest peak, which could ease downward momentum as wintering ends and tapping restarts. Yet, demand remains resilient, backed by strong Asian auto production. Geely, for instance, targets 640,000 overseas vehicle sales in 2026, a 50% year-on-year jump. Meanwhile, central banks globally flagged risks from soaring oil prices tied to the Middle East conflict, which may indirectly support rubber: since synthetic rubber is petroleum-derived, rising crude costs could lift input prices, providing a floor for the market.

Rubber futures traded around 195 US cents per kilogram, hovering near the lowest in over a week, as concerns about the Middle East conflict’s impact on demand offset support from higher oil prices and tight supply. Industries such as tire manufacturing could face higher input costs due to disrupted supply chains, potentially reducing demand for rubber-intensive products. Meanwhile, the supply outlook remained constrained by seasonal reduced output. Major producers in Southeast Asia are currently in their low-production “wintering” season, which runs from February to May, before harvesting typically ramps into late summer.