FX.co ★ Rubber Futures at Over 1-Week Low

Rubber futures recently settled at approximately 171 US cents per kilogram, marking their lowest point in over a week, driven by tepid demand dynamics. The automotive sector, which heavily relies on rubber, is under strain due to the decelerated expansion of the electric vehicle (EV) market and persistent supply chain challenges. Additionally, the slow economic growth in China, the world's leading rubber consumer, further contributes to a pessimistic market outlook. Furthermore, the European Union's initiative to postpone and amend deforestation regulations may cause buyers to delay their purchases, potentially decreasing overall demand. Conversely, the market is significantly influenced by concerns over potential disruptions to natural rubber supply due to adverse weather conditions, such as heavy rainfall in major producing countries like Thailand, the leading global supplier. Meanwhile, the Association of Natural Rubber Producing Countries (ANRPC) has forecasted a 1.3% year-on-year increase in global natural rubber production, reaching 14.892 million tonnes by 2025. During the same period, demand is projected to grow by 0.8%, reaching 15.565 million tonnes, resulting in a more constrained supply-demand equilibrium.