The prices of natural rubber and latex saw a sharp rise during May, contrary to market expectations. This increase is partly explained by improved growth expectations in China, but primarily due to weak supply.
Typically, supply starts to increase at the end of May, but the start of the high season seems to have been delayed. When it does begin, there could be a price drop, although it would likely be moderate since weather conditions remain unfavorable.
Things to consider:
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- Latex prices reached their highest levels since 2022.
- On the production side, there were weather complications in almost all producing countries, both in Southeast Asia and Africa, which have worsened the product shortage.
- According to statistics published by Malaysia, this caused a sharp drop in April's supply (see next page). The latest news indicates that the situation continued in May.
- Regarding demand, the signals are less clear, especially in China. Although the government's latest stimulus measures improved economic growth expectations, the fact is that natural rubber imports remain at low levels, with a new year-on-year drop in April. The industry also did not give positive signals, experiencing a (slight) unexpected contraction in May.
- Global car sales remain strong, with year-on-year growth in major markets in April, and it is estimated that this continued in May.