Prices remain high due to fears of insufficient supply.

Natural rubber and latex prices remain high due to buyers' concerns about an insufficient supply in the coming months, which is related to the start of the low production season.

Speculative purchases by commodity funds in China also influenced the market, continuing this week.
These factors were strong enough to offset the negative impact of Donald Trump's new tariff announcements and a higher-than-expected U.S. inflation report.

We maintain our outlook for high prices, with a downward trend only expected in the second half of the year.

Fears of insufficient supply drive up natural rubber prices.

Having entered the year's low production phase, buyers are beginning to fear a supply shortage in the coming months, as we had anticipated at the end of 2024.

It is common for prices to rise slightly during this period. In the case of latex, prices are typically up to 10% higher from January to May compared to the second half of the year. For more processed products like TSR20, the difference is slightly smaller (3%).

This time, the impact could be even greater, as the weak production close of 2024 prevented the accumulation of inventories, which are usually consumed at this time of year. It is likely that these supply shortages will keep prices high at the beginning of 2025.

Speculative purchases continue in China despite "bad" automotive industry data.

This week, speculative purchases of natural rubber futures by commodity funds in China were again observed, according to reports from the Japan Exchange Group. This pushed prices up, even after it was revealed that vehicle sales in January fell 12.1% year-over-year (-31.9% vs. December 2024).

The data was interpreted negatively by major news outlets, but it should be analyzed with caution, as the Lunar New Year occurred in January this year, reducing the sales period by four days compared to 2024.

Now, Trump will indeed impose tariffs on Canada and Mexico.

The president confirmed that, starting April 2, he will implement the previously postponed 25% tariff on imports from neighboring countries. Additionally, the U.S. president confirmed that a second round of "reciprocal tariffs" will be applied in April.

This is bad news for the global economy. For commodities like natural rubber, there is likely to be a downward price effect due to lower economic growth and decreased demand (especially since the automotive supply chain is one of the most affected), along with a strengthening dollar.