ANRPC sees weather, trade tensions shaping near-term rubber outlook

Kuala Lumpur – El Nino-related weather risks and supply-side constraints could support natural rubber (NR) prices in the short term, although geopolitical tensions, trade friction and cautious tire manufacturing continue to weigh on the market.

According to the latest NR market outlook by the Association of Natural Rubber Producing Countries (ANRPC), the market is navigating a "complex landscape" shaped by macroeconomic pressures and supply-side constraints.

Renewed US-China tariff tensions and the re-escalation of conflict in the Middle East are weighing on global economic sentiment and dampening demand for rubber-based products, including tires and gloves.

The US Federal Reserve's decision to maintain its policy rate at 3.50-3.75% on 29 July has also supported the US dollar, affecting commodity pricing and trade flows in emerging markets, ANRPC added.

In China, NR demand has remained relatively stable, but tire production and exports have shown limited growth as manufacturers remain cautious about raw-material purchases.

However, continued growth in electric vehicle sales across China, India, Southeast Asia and Europe is expected to provide longer-term support for tire demand and, consequently, NR consumption.

On the supply side, ANRPC said El Nino conditions strengthened during July, particularly in Indonesia.

“Drier conditions and increased drought risks could reduce latex availability and disrupt tapping activities, creating a potential bullish factor for natural rubber prices,” it said.

The association also noted that changes in crude-oil and petrochemical prices continue to influence synthetic rubber costs.

Disruptions in the Middle East have added uncertainty to the supply of petrochemical feedstocks, affecting the price relationship between synthetic and natural rubber.