ANRPC warns of volatile rubber market despite demand growth

The Association of Natural Rubber Producing Countries (ANRPC) has painted a mixed picture for the global natural rubber (NR) market, forecasting both price appreciation opportunities and heightened volatility in the coming months. In its May monthly review, the ANRPC cited elevated US-China trade tensions, the ongoing Iran war, and expectations that the US Federal Reserve will maintain interest rates at current levels as potential drags on rubber demand. However, accelerating EV adoption in Southeast Asia, Latin America, and South Korea is seen as a long-term demand driver. Supply-side pressures remain acute, with unusually high temperatures and rainfall disruptions during the early tapping season in major producing countries keeping raw material supplies low and prices elevated. The EU’s recent decision to lower anti-dumping duties on Chinese tires has further boosted market sentiment. Falling oil prices are easing cost pressures, dragging down butadiene and synthetic rubber costs. On the supply side, ANRPC projects global NR production to rise 2.4% year-on-year to 15.337 million tonnes in 2026, up from 14.971 million tonnes in 2025. The upward revision from an earlier estimate of 15.324 million tonnes is driven by higher output in Thailand, China, India, and Malaysia, though production is expected to decline in Indonesia and Vietnam. May 2026 production is estimated at 997,000 tonnes, a 4.7% year-on-year drop, reflecting seasonal wintering and dry weather across Southeast and South Asia. Thailand’s output is forecast to rebound to 260,000 tonnes in May from 137,200 tonnes in April, while China’s tapping activity resumes in Hainan, driving a monthly increase. Global NR consumption is projected to grow 1.3% year-on-year to 15.550 million tonnes in 2026, led by China, India, Malaysia, and Cambodia. This is a slight downgrade from an earlier forecast of 15.602 million tonnes. May consumption is estimated at 1.310 million tonnes, up 4.6% year-on-year, supported by steady tire demand tied to EV growth, resilient manufacturing in China and India, and record passenger car sales in India. Despite trade disruptions, ANRPC describes the 2026 consumption outlook as “cautiously positive,” with gradual growth expected throughout the year.