Rubber Holds in Tight Range

Rubber futures traded around 219 US cents per kilogram in mid-August, remaining range-bound since early July amid a lack of clear market direction. Higher oil prices provided some support to natural rubber by reducing the competitiveness of crude-based synthetic rubber, as concerns over the reopening of the Strait of Hormuz underpinned crude prices. However, persistent weakness in China’s domestic auto market, the world’s top rubber consumer, continued to cap gains amid concerns over tyre demand and rubber consumption. Domestic car sales fell 21.1% year-on-year in July to 1.47 million vehicles, marking a tenth consecutive monthly decline, although the pace of contraction eased. Meanwhile, vehicle exports surged 88.2% as automakers increasingly looked to overseas markets to offset intense competition at home.

Rubber futures traded around 218 US cents per kilogram in early August, remaining range-bound as rising seasonal supply and persistently weak tyre demand weighed on prices. Southeast Asia's peak tapping season continued to boost rubber output, although the risk of El Niño-related production disruptions is expected to increase as the season progresses. Meanwhile, tyre demand is likely to remain seasonally weak through mid-August, according to Guoyuan Futures, with China's Vehicle Inventory Alert Index climbing to 61.1% in July, remaining above the 50% threshold that signals excess inventory. Elevated inventories could prompt automakers to scale back production, weighing on natural rubber demand. Elsewhere, oil prices rebounded modestly after the previous session's sharp decline, lending limited support to natural rubber as higher crude prices reduce the competitiveness of petroleum-based synthetic rubber.

Rubber futures traded around 211 US cents per kilogram, continuing to move within a tight range since early this month amid the absence of a clear market direction. Trading remained subdued as lower oil prices following a pause in hostilities between the US and Iran reduced the cost advantage of natural rubber over synthetic alternatives. Demand concerns also persisted as the EU's anti-dumping duties on Chinese car and light truck tires continued to weigh on the outlook by raising the risk of weaker Chinese tire exports and lower consumption. Meanwhile, ongoing supply constraints in Southeast Asia due to El Niño continued to provide underlying support, offsetting some of the downward pressure on prices. Elsewhere, Thailand's natural rubber exports, excluding compound rubber, totaled 1.203 million tonnes in the first half of 2026, down 13% from a year earlier.