Weather Disruptions, Butadiene Rebound to Support Natural Rubber Prices

The Association of Natural Rubber Producing Countries (ANRPC) expects weather disruptions and a rebound in butadiene prices to support natural rubber (NR) prices. According to ANRPC’s monthly NR report, El Nino-related weather disruption is disrupting rainfall in major producing countries, including Thailand and Indonesia, which is a “major bullish factor”. Additionally, the recent rebound in butadiene prices due to disruptions linked to the Middle East conflict has maintained a favourable price differential for NR. However, trade tensions, weak global demand, and macroeconomic uncertainty continue to weigh on the market outlook. The US-China tariff tensions, conflict in the Middle East, and the US Federal Reserve’s decision to maintain interest rates have weakened global economic sentiment and dampened demand for rubber-based products. The global shift toward electric vehicles is also expected to reshape long-term demand for NR. The EU’s decision to impose anti-dumping duties on Chinese passenger car and light truck tires has created additional trade friction, but recent revisions to the EU Deforestation Regulation offer some relief for exporters.