Rubber prices held steady at elevated levels during a week in which most commodities—especially those related to energy—moved downward.

Trump continues to tighten trade policy against China while once again delaying much of the planned tariff increases on Canada and Mexico. Responses from other countries have already begun, and it is highly likely that global growth will be negatively affected.

In this context, the reason why natural rubber prices have not fallen further is the ongoing supply shortage that continues to support prices.

We still anticipate a decline in the second half of the year, although new projections from the Association of Natural Rubber Producing Countries were recently released, indicating a slightly more complex production outlook for 2025 than initially expected.

 


Tariff updates and economic indicators on price increases.
indicadores economicos de suba de precios

The trade war initiated by the United States continues to worsen, generating great uncertainty in the markets, with negative consequences for economic growth and commodity demand.

The 25% tariff on imports from Canada and Mexico was only partially implemented, as its application to Mexico and the automotive industry, among other products, was postponed just days later. Meanwhile, an additional 10% tariff on Chinese imports was fully implemented, bringing the total increase to 20% for the year.

In retaliation, Canada announced 25% tariffs on $155 billion worth of U.S. products, while China imposed additional tariffs of up to 15% on agricultural goods.

China's manufacturing sector rebounded in February.
toma-realista-bandera-ondeante-china-texturas-interesantes

China's manufacturing sector saw a notable rebound in February, according to both the official measurement and the private index compiled by the Caixin group.

Strong external demand played a role, although this could be linked to advance shipments to the U.S., which raises concerns about a potential slowdown in the coming months.



Oil prices fall due to oversupply outlook for 2025.
_129771014_oil12

Crude oil prices, which are often correlated with natural rubber, fell below $70 per barrel, reaching their lowest level in three years. In addition to concerns about slower growth due to the trade war, this decline was influenced by high inventory levels reported in the U.S. and the Organization of the Petroleum Exporting Countries (OPEC) decision to move forward with planned production increases.


Due to labor disputes in several countries, congestion at European ports continues to worsen. DHL estimates that up to 2.65 million TEUs (8.4% of the global fleet) could be stuck in port congestion. If these issues persist, they could temporarily halt the recent decline in freight rates following the Lunar New Year. In fact, a widespread rate increase is expected starting in March.Asia-South America routes are expected to be less affected, as an oversupply of capacity is projected for the next two months. However, special surcharges may apply due to low water levels in certain access points.

Submit a comment

You may also like

Stable Price Behavior of Natural Rubber and Latex
Stable Price Behavior of Natural Rubber and Latex
23 July, 2024

The downward trend in rubber and latex prices seems to have come to an end. Data from the past week shows stable price b...

Simultaneous weakness in the supply and demand of latex and natural rubber
Simultaneous weakness in the supply and demand of latex and natural rubber
16 September, 2024

This week's upward price raid reflects the simultaneous weakness of latex and natural rubber supply and demand. What is ...

China's economy boosts rubber demand and revises its 2025 outlook
China's economy boosts rubber demand and revises its 2025 outlook
31 March, 2025

Against all odds, China’s economic growth forecasts are starting to be revised upward and are now approaching the govern...