Rubber Futures Surge to 13-Year Highs

Rubber futures surged toward 250 US cents per kilogram, the highest level since early 2013, driven by firm raw material prices and persistent supply concerns. Supply worries intensified after congestion at Abidjan port disrupted shipments from key producer Ivory Coast. In Thailand, rubber tapping remained disrupted by rainfall, keeping raw material prices elevated, while the country's meteorological agency warned of severe rains and flash floods through September 27. The impact of El Niño also raised concerns over production, adding to supply risks. Signs of tighter availability were also evident in China, where natural rubber imports fell 6.7% year-on-year to 486,000 tonnes in August, the lowest level for the month in six years, while rubber inventories at warehouses in Qingdao, a major trading and storage hub, declined by 17,400 tonnes in the week of September 18.

Rubber futures rose above 241 US cents per kilogram in late September, moving back toward the 13-year high reached earlier this month, as supply concerns supported prices. In Thailand, heavy rainfall disrupted tapping in some production areas, contributing to elevated raw-material costs, with cup-lump prices rising 44.56% year-on-year to 73.8 THB/kg as of September 21. Although rainfall in northern and northeastern Thailand has recently eased, potentially improving immediate tapping conditions, El Niño-related weather risks could pose a longer-term threat to rubber production. Signs of tighter availability were also evident in China, where natural rubber imports fell 6.7% year-on-year to 486,000 tonnes in August, the lowest level for the month in six years, while inventories in Qingdao declined by 17,400 tonnes in the week of September 18. Meanwhile, lower crude oil prices are making synthetic rubber cheaper, potentially limiting gains in natural rubber.

Rubber futures held around 238 US cents per kilogram in late September, moving within a tight range after retreating from a 13-year high reached earlier this month. Immediate supply risks eased somewhat as rainfall in parts of Thailand was expected to improve, potentially supporting rubber tapping, although El Niño-related dryness remains a concern across much of Southeast Asia. Meanwhile, softer demand from China, the world's largest rubber consumer, also weighed on prices as weaker tire production and operating rates reduced raw-rubber purchases. Some manufacturers also plan holiday closures ahead of China's National Day and Mid-Autumn Festival, which could further reduce near-term rubber demand. In the meantime, crude oil prices decreased for the fifth day, making synthetic rubber cheaper and reducing the relative appeal of natural rubber.