Global rubber outlook: stability, rains, congestions, and mixed signals from China

Price stability in a market with mixed signals

In recent weeks, the rubber market has shown signs of price stability, despite being surrounded by factors that generate uncertainty.
The recent truce between Israel and Iran, mediated by U.S. intervention, helped ease fears of a potential escalation in oil prices, which indirectly benefits global supply chains, including rubber.

Additionally, the continued depreciation of the U.S. dollar worldwide supports the prices of raw materials, creating an apparent equilibrium.
However, this stability may be fragile, as the market remains exposed to geopolitical shifts, supply variations, and changes in global demand.

China's rubber demand remains weak and raises concerns Demand in China

The Chinese market, which is key to global rubber consumption, continues to show a slow pace. According to the Sunsirs consultancy, tire production has slightly decreased, while inventories are growing, which puts downward pressure on international prices.Although Chinese authorities maintain positive expectations for economic growth, rubber demand has not yet recovered.This mismatch between supply and consumption creates uncertainty for the coming months, especially considering that a higher production season is approaching.China’s situation will be a key factor to monitor in the short term to anticipate price movements.

Rains slow supply and limit the price drop Climate impact

Heavy rains in rubber-producing regions in northern and northeastern Thailand have caused temporary production disruptions.This weather event helped stop the downward pressure that had been pushing prices lower in recent weeks.The floods particularly affected key areas for rubber extraction and processing, which could result in a slight reduction in supply during the second half of June.Although the general outlook for the season remains favorable, these types of weather events highlight the market’s vulnerability to abrupt climate changes.

Global port congestions complicate logistics chains Port congestion

Major ports around the world are currently facing serious congestion issues, with a significant impact in northern Europe, Singapore, China, and key terminals in northern South America.Shipping schedules are becoming increasingly erratic, with frequent shipment cancellations and containers remaining at terminals much longer than usual.These bottlenecks are causing significant delays and disruptions in international supply chains, affecting multiple industries, including the rubber sector.Despite this complicated scenario, analysts forecast a possible general decrease in freight rates starting in July, which could offer some relief to global trade in the medium term.

Freight, rubber, latex, supply, demand

Global rubber outlook: stability, rains, congestions, and mixed signals from China

Price stability in a market with mixed signals

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