As Chinas demand for new energy vehicles continues to grow, natural rubber prices have recently witnessed a significant rise.This trend is driven by multiple factors, including the strong demand of the Chinese market, the revenue of the producer in Thailand, and the global markets concerns about future supply.

According to the data of the China Automobile Industry Association, in the first half of 2023, Chinas monthly sales of new cars were stable between 2 million and 2.5 million units, and by the end of the year, sales achieved significant growth, with the growth of new energy vehicle sales especially prominent.This growth trend directly promoted the increase in demand for natural rubber for tyres.According to the French Michelin Group revealed, in December 2023, Chinas demand for new car tyres increased by 30%.

The supply of natural rubber is also increasingly the focus of industry attention. Thailand, as the largest producer of natural rubber, has recently suffered from adverse weather, which has caused rubber output to fail to meet expectations. Southeast Asia generally has a high rubber tree output period from November to January, but this years increase in output has not been fully increased.

The rise in prices of natural rubber futures on the Osaka Exchange further reflects market concerns about supply tensions. On February 1, Osaka Exchange futures price (RSS) reached 283.6 yen/kg, up 11% from the end of 2023.

The rise in cash prices in Thailand further confirms market concerns about natural rubber supply tensions.On January 31, Thailands cash prices reached 73.07 baht/kg, at a high for a year and a half.In addition, domestic rubber inventories in Japan were also affected, and data released by the Osaka Stock Exchange showed that natural rubber inventories in Japans national designated warehouses as of January 20 were 6240 tons, far below the inventory levels of the same period of the previous year.

With the expected growth of new car sales in China and the upcoming rubber tree cuts in Southeast Asia, market concerns about natural rubber inventory tensions have intensified.Industry experts predict that natural rubber prices will fall sharply at least before the end of the cuts.

The rise in natural rubber prices not only affects the cost of rubber products, but also causes rubber products manufacturers such as Michelin Tyres Corporation in Japan to raise product prices.This price hike trend may continue, especially in the context of the devaluation of the yen, the rise in import costs puts additional pressure on Japanese manufacturers.

In summary, the rise in natural rubber prices is becoming a major challenge facing the global rubber product industry. China’s market demand, producing country revenue and global market concerns about future supply tensions have driven the rise in natural rubber prices.As the global demand for new energy vehicles grows, the supply and price of natural rubber as a key raw material will continue to be an important factor affecting the global automotive industry and rubber products market.