Natural rubber production is expected to be below demand for the fifth year in a row in 2025. According to the Association of Natural Rubber Producing Countries (ANRPC), global natural rubber production is likely to rise 0.3% in 2025. However, worldwide demand is expected to far outstrip this number, at an estimated 1.8%.
Rubber is used widely in a number of products such as automotive parts, industrial goods, footwear, conveyor belts, medical equipment and flooring, among several others. The material is prized primarily for its durability, elasticity, water resistance and low maintenance.
The global rubber market is expected to hit around $65.7 billion (€60.3bn) by 2030, according to a Grand View Research report.
Two kinds of rubber are mainly traded in global markets. These are synthetic rubber, which is made from natural gas and petrochemical sources, and natural rubber, which is derived from tropical trees.
Some of the top natural rubber producing countries include Thailand, Indonesia, Vietnam and Malaysia. Other countries such as China, India, the Ivory Coast, Sri Lanka, Cameroon and the Philippines are also major producers.
Rubber futures dropped around 4% this week, trading at 195 US cents per kilogram on Friday morning, having also fallen 4.8% on a monthly basis. This was the lowest since mid-February, as traders balanced supply concerns with the effects of continuing trade tariffs.
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One of the major reasons for the expected gap between natural rubber production supply and demand in 2025 is because of lagging output in several key countries such as Vietnam and Indonesia for several years now.
This has mainly been caused by consistent adverse and extreme weather in recent years. That was the case in Thailand, which was hit by a heatwave at the beginning of last year, meaning that the low production season that rubber crops usually see between February and May was extended. Very hot weather also causes stunted growth in rubber trees.
In Thailand, significant flooding and very heavy rainfall followed the heatwave in early 2024, which then also curbed peak season rubber output. These frequent extreme weather events can significantly decrease overall latex production.
China, which is the fifth-largest rubber producer worldwide, has faced the same issue with adverse weather. Typhoons and heavy rains have significantly damaged vital rubber producing areas such as Cheng Mai and Lin Gao, on Hainan Island.
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