Global risks, automotive demand shape short-term natural rubber outlook

Kuala Lumpur – The natural rubber (NR) market is set to face a mix of “upside potential and volatility” in the coming months, driven by geopolitical tensions, trade uncertainty and recovering automotive demand.

In its latest monthly NR report published 30 March, the Association of Natural Rubber Producing Countries (ANRPC), said ongoing US-China trade tensions could “weigh on global economic activity and disrupt demand patterns.”

Meanwhile escalating risks involving Iran, Israel and the US may interfere with commodity shipments, “leading to short-term price fluctuations and supply chain disruptions.”

At the same time, ANRPC pointed to improving fundamentals in the automotive sector: a projected rise in car production, particularly in new energy vehicles (NEVs) across China, India and Southeast Asia is likely to support stronger NR demand and “potentially lift prices.”

Currency movements are also expected to play a role, with uncertainty around US monetary policy set to “influence pricing dynamics and trade flows,” the report said.

On the supply side, the association warned that “unpredictable weather conditions in key rubber-producing countries ahead of the low-yield season” could tighten availability in “an already constrained market,” adding upward pressure on prices.

However, ANRPC cautioned that broader economic uncertainty and existing tariff structures may offset some of the gains.

These factors could “disrupt trade flows and lead to higher inventory levels of both raw materials and finished goods,” potentially slowing demand growth in the near term.

Overall, the association expects market direction to remain sensitive to both macroeconomic developments and sector-specific supply constraints.