Rubber Futures at Near 2-Week High

Rubber futures rose further to surpass 231 US cents per kilogram, near the highest since early June, amid ongoing weather-related supply concerns. Major Asian rubber producers, including Thailand and Vietnam, are currently affected by seasonal heavy rainfall associated with the monsoon period, which is disrupting tapping activities and also curbing output. Rubber tapping is highly weather-sensitive, as heavy rain reduces tapping hours and delays latex collection, even during the May-to-October peak season when output would normally rise under more favourable conditions. Meanwhile, lower oil prices linked to the anticipated US-Iran deal limited the upside, making synthetic rubber more competitive and weighing on demand for natural rubber.

Rubber futures rose to around 225 US cents per kilogram in mid-June, rebounding from a two-week low, supported by persistent supply concerns. Although major producers including Thailand, Indonesia, and Malaysia are in their main tapping season (May–October), which typically boosts overall supply due to more favourable growing conditions, forecasts of isolated but very heavy rainfall across northern Thailand, Myanmar, Laos, and northern Vietnam have raised concerns, as prolonged wet conditions can disrupt rubber tapping and limit short-term output. Meanwhile, a US-Iran peace deal has pushed oil prices lower, which could weigh on natural rubber demand as cheaper crude reduces synthetic rubber production costs, making substitutes more competitive. However, the market is more focused on the potential return of rubber demand from the Middle East following the preliminary agreement to end the war.

Rubber futures eased to around 225 US cents per kilogram, the lowest since late May, pressured by rising supply prospects and weak seasonal demand. Asian natural rubber producers like Thailand, Indonesia and Malaysia are currently in the main tapping season, which typically runs from around May to October. During this period, higher rainfall and more favourable growing conditions enable rubber trees to produce more latex, increasing supply. Supply in the synthetic rubber segment is also expected to rise as Chinese butadiene rubber producers restart operations at higher capacity following maintenance. On the demand side, the automotive market usually weakens in summer as consumers prioritise travel and leisure, reducing tyre demand and weighing on rubber prices.