Export rubber prices in early 2024 have increased compared with 2023. Globally, natural rubber prices have surged to their highest levels in seven years, driven by rising demand from China’s booming electric vehicle (EV) industry and poor harvests in Thailand, the world’s largest rubber producer.
Global Rubber Prices Reach 7-Year High
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On February 19, 2024, July natural rubber futures on the Osaka Exchange (OSE)—Asia’s key benchmark—traded at 298.5 yen (USD 1.99) per kg, the highest closing level since February 17, 2017. This represents a 13% increasecompared to the end of 2023.
Across other Asian markets, prices also climbed sharply. On the Shanghai Futures Exchange, May contracts reached 13,555 yuan per ton (≈ USD 1,883), while on the Singapore Commodity Exchange (SICOM), March delivery prices hit 155.20 U.S. cents/kg, marking a 1.5-year high.
Surging Vehicle Sales Boost Rubber Demand
A key driver behind this upward trend is China’s booming automobile market. According to the China Association of Automobile Manufacturers (CAAM), monthly new vehicle sales averaged around 2 million units in the first half of 2023 but jumped 27.4% year-on-year to 2.97 million units in November, and 3.15 million in December, up 23.5%. CAAM forecasts China’s total vehicle sales to reach 31 million units in 2024.
This surge in vehicle production has fueled higher demand for natural rubber, particularly for tire manufacturing. Michelin reported that China’s new tire demand in December 2023 rose by 30% year-on-year. Analysts expect tire-grade rubber prices to remain high and stable in the coming months.
Poor Harvests and Weather Disrupt Supply
According to Gu Jiong, Head of Corporate Services and Investment at Yutaka Trusty Securities, Thailand has been unable to increase production this season due to extreme weather conditions. The Thai Meteorological Department warned that severe weather between February 23–25, 2024 could further damage rubber plantations in the northeast, east, and central regions.
As a result, rubber inventories in Japan have dropped sharply. By January 20, 2024, OSE warehouses held only 6,240 tons of natural rubber, compared to around 10,000 tons in previous years, raising concerns over supply shortages.
Southeast Asia Enters Low-Production Season
Southeast Asia, which accounts for the majority of the world’s rubber output, has entered its low-production season (February–April). Besides unfavorable weather in Thailand, daytime heat in Malaysia has also reduced latex yields, forcing some tappers to work at night to preserve production levels.
Outlook: Prices to Stay High Until Late 2024
Analysts agree that rubber prices will remain elevated until the end of the low-production period. The Japan branch of Michelin (Nihon Michelin Tyre) recently announced price hikes of 6–10% for passenger and commercial tires, citing rising labor and raw material costs.
Overall, strong demand from the EV and automotive sectors, tight supply, and poor weather in major producing countries are expected to keep natural rubber prices firm throughout 2024.