Storms in southern Thailand caused a 25% reduction in natural rubber production during December 2024.
At the beginning of 2025, rainfall significantly subsided, allowing production to resume. However, we are approaching the start of the low season, which will seasonally reduce supply in the coming months.
For this reason, it will not be easy to recover the low inventory levels until mid-2025.
Price dashboard
Rubber prices | USD/100kg
Prices resume their decline: is the market anticipating a more normal 2025?
Prices continue to drop, reaching their lowest level since November.
As we have previously noted, the price peak in December could only be explained by a critical supply situation. January began without major complications for producers, and the expectation of a year closer to normality should drive prices down. However, the speed of this decline is surprising, considering the poor production results in December and the low inventory levels in China.
China's inflation and industrial data may have triggered sales, but other demand indicators continue to exert upward pressure. Additionally, oil prices, which are somewhat correlated with natural rubber, have recently risen. It seems investors are anticipating a more "normal" 2025 and took the opportunity to sell at the price peak.
Mixed data from the Chinese economy
Consumer inflation in China slowed to 0.1% annually, below expectations. This has been interpreted as a sign that consumption is not yet recovering despite economic stimuli (such as the recent increase in public sector wages).
However, regarding demand for natural rubber, the most recent data should be bullish for prices: electric car sales hit record highs in December, and inventories continue to decline, reaching already very low levels.
Optimistic forecasts for the latex glove sector in 2025
Demand for latex derived from glove production could grow in 2025 due to increased consumption.
The market is overcoming the crisis of overproduction. Prices are starting to rise, and the excess inventory is expected to be resolved by 2026.