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In April 2025, China’s rubber market experienced a slight decline of approximately 4.2% month-on-month. However, the decline was less severe than previous trends observed over the past few months. Several factors contributed to this downward trend, including shifts in downstream demand, fluctuations in raw material costs, and changes in supply dynamics.

The decline in prices results from global and domestic factors, mainly due to oversupply and reduced demand. A key factor weighing on the market has been the constant oversupply from major rubber-producing nations. Global production, particularly from Southeast Asian countries, has surged, as Thailand, Indonesia, and Vietnam, which together account for nearly 70% of global natural rubber output have entered the peak production season during this period. The increased supply from these traditional suppliers created sufficient availability in the market, particularly when the inventories in China's ports were already fully stocked. This supply abundance naturally exerted downward pressure on domestic price benchmarks.

Demand-side weaknesses have also contributed to this slight decline. China’s automotive sector, the primary consumer of rubber showed neutral growth during this quarter. Tire manufacturers maintained a careful procurement strategy, as many of them are opting to work through the existing inventories. The moderate contraction approach in commercial vehicle production particularly affected demand for heavy-duty tire grades, creating a noticeable drag on the natural rubber segment.

Additionally, external trade dynamics introduced additional complications. The imposition of new tariffs and escalation of trade tensions, particularly between major economies, have created an uncertain environment that has slowed down industrial activities and as a result, reduced the demand for raw material like natural rubber. Furthermore, this cautious stance among manufacturers and buyers has further contributed to the decline of the rubber market.

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Looking ahead, given these factors, such as rising supply, high port inventories, and subdued demand, the natural rubber market is expected to remain under pressure in the near term. Currently, inventory stocks are full, and the signs of demand are showing slight improvements only. This infers buyers are in charge of the market at the moment. However, if there is a major disruption in supply or if demand supply suddenly picks up, the situation can change quickly.