Rubber prices remain high amid commodity downturn

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.

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.

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.

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.