High Rubber and Latex Prices with Daily Volatility

Despite buyers' resistance to finalizing transactions, rubber and latex prices have remained high due to low supply and exhibit considerable daily volatility. What's happening? Recent statistics have revealed an even greater-than-expected drop in supply.

Prices Remain High Awaiting Production Increase

Even with significant daily volatility, prices have stayed at elevated levels this week. Buyers resist validating these prices, but they do not drop due to the low supply. The latest statistics show a greater-than-expected decline in supply.

In Other News: EU Confirms Tariffs on Chinese Electric Vehicle Imports
The imposition of tariffs on Chinese electric vehicle imports in the European Union has been confirmed, potentially slowing the growth in tire demand.

Confirmed Production Drop in April, but Recovery Expected Soon

Malaysia's natural rubber production plunged by 9.1% year-on-year in April.
The Malaysian Statistics Department also provides estimates (with less precision) for other countries, and the decline is widespread. In Thailand, production is estimated to have fallen by nearly 50% year-on-year, while Indonesia saw a 20% drop.
These data, even worse than expected, confirm the supply shortage driving up prices. However, the Association of Natural Rubber Producing Countries reported that the wintering season (a period of low production) in the northern hemisphere has ended, which could ease the shortage.

European Union Confirms Tariffs on Chinese Electric Vehicle Imports

The tariffs range from 17.4% to 38.1%, varying according to the cooperation of producers in the investigation into Chinese subsidies. In 2023, China exported 438,000 units to Europe, almost 15% of its production.

The tariffs could delay the growth of Chinese exports, which have been the main driver of the automotive sector (and thus rubber demand) in China. However, a sudden halt is unlikely as China expands into other markets like Brazil, and BYD, the leading manufacturer, could remain competitive with its 17.4% tariff.

Rumors of Chinese Government Rubber Purchases Persist

This week, Japan Exchange Group reported as an "unconfirmed" news item that China is considering purchasing 70,000 tons of natural rubber for its government reserves. Whether true or not, the rumor has led to speculative buying, further boosting prices. According to Helixtap, China's stocks remain high, although they have declined in recent weeks.