The Import-Export Department (Ministry of Industry and Trade of Vietnam) forecasts that rubber prices will continue to rise in the coming months due to growing concerns over supply shortages, as Southeast Asia has entered the low-harvest season lasting from February to April.
Rising Inventory Levels in China
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As of March 8, 2024, natural rubber inventories at the Shanghai Futures Exchange reached 215,333 tons, up 899 tons from the previous week. Warehouse receipts totaled 210,080 tons, an increase of 220 tons. Inventories at Warehouse No. 20 stood at 118,339 tons, up 3,427 tons, while warehouse receipts there increased by 605 tons.
Meanwhile, natural rubber stocks at Qingdao Free Trade Zone fell to 129,500 tons, down by 0.5 thousand tons. Inventories at Qingdao General Trade Warehouse decreased to 428,100 tons, down by 2.1 thousand tons, according to Vietnam’s Ministry of Industry and Trade.
Supply Deficit Expected in 2024–2025
Analysts predict that the global rubber supply shortage could persist through 2024–2025, with an annual deficit of 600,000–800,000 tons. This shortfall is driven by sustained global demand growth of 4–6% per year, supported by the recovery of the automotive and tire manufacturing industries, particularly in China.
In contrast, supply growth will remain limited, averaging only 1–3% annually, due to factors such as leaf disease and extreme weather conditions during the transition between El Niño and La Niña phases in 2024. Moreover, many farmers have shifted to other industrial crops with higher profitability after years of declining rubber prices.
Declining Rubber Plantations in Major Producers
Global natural rubber supply is projected to grow by just 1–3% per year between 2024 and 2025. Rubber plantation areas in Thailand and Indonesia—which together account for 51% of global latex production—have continued to shrink due to disease outbreaks and the shift to more profitable crops. Rubber trees require 5–7 years before latex extraction begins, making replanting less attractive.
Price Outlook for Late 2024 and 2025
The peak harvest season for rubber in Southeast Asia—responsible for roughly 75% of global latex output—typically begins in late Q3, following the leaf-shedding period between February and May. Manufacturers usually accelerate purchases toward the end of the year after forecasting next year’s business performance. Therefore, rubber prices in the second half of 2024 will likely determine market trends in 2025.
Notably, the potential onset of La Niña in late 2024 may further threaten Thailand’s rubber supply and global availability, as it coincides with the peak tapping season following the leaf-change phase.
PHS Securities Forecast: Rubber Prices to Stay Firm
With sustained recovery in key consuming sectors and persistent supply risks, PHS Securities forecasts that SR20 rubber prices could remain elevated in the range of USD 1.6–1.8 per kg, comparable to levels seen between 2021 and the first half of 2022—representing an increase of 10–20% over 2023.