Market Data Overview

In futures trading, the main RU contract closed at 19,180 yuan per tonne yesterday, up 480 yuan from the prior session. The NR main contract settled at 16,345 yuan per tonne, gaining 500 yuan, while the BR main contract finished at 15,605 yuan per tonne, advancing 720 yuan.

On the spot market, full-cream latex from Yunnan was quoted at 18,600 yuan per tonne in Shanghai, up 450 yuan. In the Qingdao bonded zone, Thai blended rubber stood at 18,150 yuan per tonne, rising 450 yuan. Thai STR20 grade rubber in the Qingdao Port bonded zone was offered at $2,430 per tonne, up $70, while Indonesian SIR20 grade rubber climbed $80 to $2,370 per tonne.

Sinopec Qilu Petrochemical's BR9000 ex-factory price held at 15,700 yuan per tonne, unchanged, while Zhejiang Transfar's BR9000 market price increased 450 yuan to 15,500 yuan per tonne.

Industry Updates

The latest July 2026 report from ANRPC projects global natural rubber production to decline 5.2% year-on-year to 1.321 million tonnes in July, up 6.3% from the previous month. Consumption is expected to rise 0.8% to 1.297 million tonnes, increasing 0.3% month-on-month.

For the first seven months, cumulative global production is estimated to fall 2.3% to 7.426 million tonnes, while cumulative consumption is projected to drop 1.6% to 8.759 million tonnes. Full-year 2026 production is forecast to grow 2.1% to 15.279 million tonnes, with Thailand up 1.4%, Indonesia down 0.8%, China up 2.9%, India up 4.4%, Vietnam down 4.2%, Malaysia up 6.9%, Cambodia up 2.9%, Myanmar up 1.1%, Sri Lanka up 12.4%, and other non-member countries up 5.7%.

Global consumption for 2026 is projected to increase 0.4% to 15.356 million tonnes, with China up 1.2%, India up 0.2%, Thailand down 3.5%, Indonesia up 1%, Malaysia up 8.2%, Vietnam down 5.7%, Sri Lanka down 5.1%, Cambodia up 7.5%, the Philippines up 13.8%, and other non-member countries down 0.1%.

China's July 2026 natural rubber imports (including technically specified rubber, latex, smoked sheets, primary shapes, blended rubber, and compound rubber) totaled 458,700 tonnes, down 5.07% month-on-month and 3.4% year-on-year. Cumulative imports for January-July reached 3.5898 million tonnes, down 0.3% year-on-year.

Data from the General Administration of Customs released on August 18 shows China's rubber tire exports in the first seven months of 2026 reached 5.76 million tonnes, up 2.4% year-on-year, with export value of 96.3 billion yuan, down 3%. New pneumatic rubber tire exports totaled 5.54 million tonnes, up 2.2%, valued at 92.3 billion yuan, down 3.2%. In unit terms, exports reached 422.62 million units, up 1.7%. Automobile tire exports for January-July were 4.82 million tonnes, up 0.6%, with export value of 77.4 billion yuan, down 5.5%.

Retail sales of passenger vehicles in China reached 1.461 million units in July 2026, down 20.9% year-on-year and 8.8% month-on-month. Cumulative retail sales for the year stood at 10.173 million units, down 20.3%. The market exhibited a pattern of sustained pressure on overall volumes, weakening month-on-month momentum, and extreme structural divergence, with pronounced off-season characteristics and further deepening of structural adjustments.

Natural Rubber Analysis

As of September 7, 2026, the RU basis stood at -580 yuan per tonne, narrowing 30 yuan. The spread between RU main contract and blended rubber widened 30 yuan to 1,030 yuan. NR basis was 129 yuan per tonne, down 24 yuan. Full-cream latex was quoted at 18,600 yuan per tonne, up 450 yuan, blended rubber at 18,150 yuan, up 450 yuan, and 3L grade at 18,900 yuan, up 300 yuan.

STR20 was offered at $2,430 per tonne, up $70. The spread between full-cream latex and 3L was -300 yuan, widening 150 yuan, while the spread between blended rubber and butadiene rubber stood at 2,450 yuan, up 450 yuan.

In raw materials, Thai RSS3 was quoted at 84.78 baht per kilogram, up 1.23 baht. Thai cup lump was at 72.50 baht per kilogram, up 1.00 baht, while Thai latex held at 78.50 baht. The latex-cup lump spread tightened 1.00 baht to 6.00 baht per kilogram.

Operating rates showed all-steel tire production at 65.14%, up 0.06 percentage points, while semi-steel tire production edged down 0.88 percentage points to 64.42%.

Inventory data revealed social inventories of natural rubber at 619,051 tonnes, down 8,681 tonnes. Inventories at Qingdao Port rose 2,022 tonnes to 1,144,117 tonnes. RU futures inventory declined 690 tonnes to 143,810 tonnes, while NR futures inventory fell 605 tonnes to 12,196 tonnes.

Butadiene Rubber Analysis

The BR basis was -205 yuan per tonne, narrowing 320 yuan. Sinopec's ex-factory butadiene price rose 450 yuan to 14,900 yuan per tonne. Qilu Petrochemical's BR9000 was unchanged at 15,700 yuan, while Zhejiang Transfar's BR9000 rose 450 yuan to 15,500 yuan. Shandong private-sector butadiene rubber was quoted at 15,400 yuan, up 400 yuan. Import profit for butadiene rubber from Northeast Asia was -1,972 yuan per tonne, improving 360 yuan.

Operating rates for high-cis butadiene rubber fell 9.33 percentage points to 67.52%. Trader inventories of butadiene rubber increased 990 tonnes to 6,950 tonnes, while enterprise inventories declined 2,050 tonnes to 18,500 tonnes.

Trading Strategy

For RU and NR, a cautiously bullish stance is maintained. The sharp rally in synthetic rubber and continued El Ni帽o weather effects are jointly driving natural rubber prices higher. In the short term, producing regions remain affected by rainfall disruptions, supporting strong raw material prices. Domestic downstream demand is entering the traditional peak season, which should boost raw material demand. The overall supply-demand balance remains tight. However, given elevated absolute price levels, attention should be paid to potential negative feedback from significantly compressed tire producer margins. Chasing prices aggressively is not recommended.

For BR, a cautiously bullish outlook is also maintained. Ongoing instability in US-Iran relations has fueled concerns over supply risks, pushing crude oil prices higher and strengthening cost support for butadiene, which continues to rise. Additionally, maintenance and load reduction at some domestic butadiene units provide further upward support. Cost support for butadiene rubber is strengthening. From a fundamentals perspective, recent maintenance at several units has eased short-term supply pressure. Downstream tire demand is entering the traditional peak season, modestly alleviating the loose supply-demand balance. Continued strength in upstream butadiene prices has also widened production losses for butadiene rubber. With production losses combined with continued upstream price gains, butadiene rubber is likely to remain supported.

Key Risks

Key risks include developments in the US-Iran conflict, weather changes in major producing regions, upstream unit operations, and downstream demand fluctuations.

Disclaimer

This report is based on publicly available information believed to be reliable, but no warranty is made regarding its accuracy or completeness. The opinions, conclusions, and forecasts herein reflect views as of the publication date and may change without notice. This report is for reference purposes only and does not constitute investment advice. Investors should exercise independent judgment. Neither the company nor the authors accept any liability for losses arising from use of this report. All rights reserved. Unauthorized reproduction or distribution is prohibited.