Natural Rubber Prices Climb Amid Supply Deficit and Tyre Demand
Natural rubber prices reached yearly highs in May, with a projected 400,000-tonne global deficit anticipated for 2026. Aging plantations and weather disruptions are tightening supply.
Natural rubber prices have climbed steadily through 2026, reaching yearly highs in May. The Chinese benchmark price touched RMB 17,858.33 per tonne on May 8, with year-to-date gains exceeding 15 percent. This positions rubber as one of the stronger performing soft commodities this year.
The supply side is experiencing structural challenges. Aging rubber trees, past their peak yield, combined with weather disruptions affecting key producing nations like Thailand and Indonesia, are leading to reduced output and tighter availability. Early 2026 estimates point to a global supply deficit of approximately 400,000 tonnes.
Demand has remained robust, supporting the price rally. Tyre manufacturing continues to be the largest consumer, and automotive production in Asia has shown resilience. Geely, for example, targets 640,000 overseas vehicle sales in 2026. Demand from latex goods, medical glove producers, and industrial rubber users has also contributed to baseline consumption.
Furthermore, higher crude oil prices are increasing the cost of synthetic rubber, which is petroleum-derived. This narrows the price differential that typically allows tyre makers to substitute away from natural rubber, providing additional support to natural rubber prices.