Since 2025, the global natural rubber market has been affected by factors such as macroeconomic uncertainties, geopolitical risks, supply constraints, and climate change, resulting in fluctuating prices. Thai natural rubber (STR20) prices have traded between $1650 and $2160 per ton. Currently, the market is at a critical turning point, urgently needing to develop new trading logic and explore a sustainable dynamic equilibrium path.
The pricing logic of natural rubber is rooted in its unique cross-sectoral attributes: upstream, it is linked to agriculture and subject to climate and geography, exhibiting a distinct supply cycle; downstream, it is tied to industry, with demand highly synchronized with the macroeconomy and manufacturing activity. This "agriculture-industry integrated" industrial chain characteristic makes natural rubber price fluctuations naturally possess both the "supply elasticity" of agricultural products and the "demand elasticity" of industrial products, making it an important micro-indicator for observing economic cycles.
Currently, the macro level is undergoing a profound structural shift. Factors such as the divergence in monetary policies among major economies, the restructuring of the global trade landscape, and the normalization of geopolitical risks constitute a new macroeconomic paradigm influencing natural rubber pricing. Furthermore, the convergence of energy transition and supply chain regionalization trends has led to an unprecedented intensity and complexity in the transmission of macroeconomic factors to natural rubber prices. Therefore, natural rubber price fluctuations are increasingly exhibiting macroeconomic-driven characteristics.
Synthetic rubber and natural rubber have a significant substitution relationship in downstream applications, and the core logic behind their price linkage lies in the cost side. As a downstream product of crude oil, the cost of synthetic rubber is directly affected by oil price fluctuations. The dual-chain mechanism of cost and substitution constitutes a key path for cross-market transmission: oil price fluctuations affect the cost and price of synthetic rubber, thereby altering its cost-effectiveness compared to natural rubber, ultimately triggering demand shifts and reshaping the supply and demand pattern of natural rubber.
From a structural trend perspective, in the fourth quarter of 2025, butadiene rubber futures prices fell to a new low since their listing, validating the cost-driven substitution logic. This pattern may continue in 2026. Against the backdrop of an uncertain global economic recovery and intensified supply and demand dynamics in the crude oil market, the price difference between synthetic rubber and natural rubber will fluctuate more frequently, leading to more flexible raw material selection strategies in downstream industries (such as tire manufacturing), further amplifying the market impact of the substitution effect.
Looking ahead to 2026, natural rubber prices are expected to fluctuate and consolidate at a low level before gradually rising. On the one hand, rising costs and weakened supply elasticity will solidify the bottom range of prices; on the other hand, differentiated demand structures and substitution by lower-priced synthetic rubber will limit the upside potential.
From a driving perspective, systemic supply-side tightening is the core support, mainly reflected in crop rotation in major Southeast Asian producing regions, aging plantations, and declining production capacity due to environmental policies, as well as the potential disruptions to short-term output and logistics caused by La Niña. On the demand side, a "rising in the east and stable in the west" pattern will emerge, with the resilience of the Indian and Chinese markets providing important bottom support.
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