From May 2025 to May 2026, the natural rubber market will experience a sharp upward trend. According to data from Shengyi Society, the price of natural rubber has risen from 13658 yuan/ton on May 28, 2025 to the current 17600 yuan/ton, a year-on-year increase of 28.86%. This round of rise is the result of long-term bottlenecks on the supply side, extreme weather shocks, and the resonance of steady recovery on the demand side.
Supply and demand resonance drives the upward trend of Tianjiao market
The supply side continues to contract. The main production areas of natural rubber in the world are concentrated in Southeast Asia, with Thailand, Indonesia, and Malaysia contributing over 70% of the production. However, the current production areas are facing three pressures: aging rubber trees, shrinking planting areas, and frequent extreme weather events. Thailand, as the largest producer, has an average age of over 25 years for rubber trees, with more than half of them being aged. Its production capacity has been declining year by year; At the same time, rubber farmers have switched to planting economic crops such as oil palm and fruits, resulting in a continuous decline in the area of newly planted rubber plantations for many years. However, it takes 7 years for rubber trees to be planted and harvested, and the supply elasticity is seriously insufficient.
From 2025 to the first half of 2026, the El Ni ñ o phenomenon will cause sustained high temperatures and droughts in Southeast Asia. The rainfall in production areas such as Thailand and Vietnam will be 30% -50% less than usual, resulting in delayed cutting times and a significant decrease in latex production. The price of Thai cup rubber will increase by 29% year-on-year.
The domestic production areas in Hainan and Yunnan are also affected by drought, with a production reduction of about 30% in Hainan by 2025, further exacerbating global supply shortages.
According to ANRPC data, the global natural rubber production in 2025 will be 14.996 million tons, a year-on-year increase of only 2.0%; The expected production in 2026 is 15.324 million tons, while demand is expected to reach 15.602 million tons, widening the supply-demand gap to 400000 tons, resulting in continuous years of insufficient production and demand.
Moderate recovery on the demand side. More than 70% of the demand for natural rubber comes from the tire industry, and the prosperity of the automotive industry directly affects market trends. Since 2025, the global automotive industry has gradually recovered, and domestic production and sales of new energy vehicles have continued to grow. The amount of rubber used per vehicle is about 15% higher than that of fuel vehicles, and tire wear is faster and replacement cycles are shortened, significantly driving demand for natural rubber. Combined with domestic heavy truck updates and infrastructure investment, the demand for all steel tires has steadily increased. In addition, the natural rubber inventory in Qingdao Free Trade Zone continues to be at a low level in recent years, with tight spot circulation and intensified price increases due to traders’ hoarding behavior.
From a fundamental perspective, the tight supply-demand balance in the natural rubber market is difficult to reverse in the short term. On the supply side, the current situation of aging rubber trees and low planting willingness in the main production areas of Southeast Asia is difficult to improve quickly, and extreme weather disturbances still exist, with limited new production capacity; On the demand side, the recovery of the global automotive industry and the popularization of new energy vehicles will continue to support tire demand, and the consumption potential of emerging markets will gradually be released. In the short term, after the price surges, it may face downward pressure, but the upward logic in the medium and long term remains unchanged. The natural rubber price center is expected to maintain a high level of operation, with increased volatility.
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