Highlights 

• Trade war impacts the trade flow 
• Arbitrage narrows on wintering 
• Fluctuating inventory level indicates at a whimsical buying pattern 

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The rubber trade in China is significantly influenced by geopolitical factors, especially the current tariff disputes with the United States and the prevailing uncertainties in the global economy. In March 2025, tariffs, trade data, and inventory trends significantly influenced market sentiment, affecting both domestic and international purchasing patterns.

Tariff Tensions Impacts Trade Flow 

The increase in U.S. tariffs on auto imports has significantly impacted China's rubber trade, with notable consequences for tire manufacturers and automotive supply chains. Anticipating more robust policy measures from the Chinese government to address these trade barriers, market participants are exercising caution. Furthermore, the implementation of protectionist measures in the U.S. has constrained the movement of global capital, thereby exerting additional pressure on Asian economies through a reduction in demand.

The overall market sentiment indicates a downward trend, despite sporadic purchases by tire manufacturers. The appreciation of the yuan in China has impacted purchasing decisions, resulting in a transition towards domestic cargoes rather than international imports. This trend corresponds with China's overarching economic strategy aimed at minimizing reliance on foreign sources in the context of ongoing trade tensions.

Imports and Exports Facing Challenges

February 2025 trade data exhibited varied trends within China's rubber sector. Imports experienced a minor uptick attributed to post-Lunar New Year restocking activities, whereas exports encountered a notable decrease. The decline in exports, which decreased by nearly xx% month-on-month, can be linked to the impact of U.S. tariffs and the strategic frontloading of exports in prior months.

Chinese tire exports experienced significant reductions in major markets, with declines of xx% in Mexico, xx% in Russia, and xx% in Germany. The UK recorded a xx% decline in imports from China. 

In February, imports of TSR experienced a xx% increase, influenced by heightened demand on the account of some restocking. 

Source: Customs data & Helixtap analytics 

Inventory Trends and Market Projections

Throughout March, China's rubber inventory levels exhibited fluctuations influenced by seasonal variations and broader macroeconomic conditions. The restocking that occurred after the Lunar New Year led to a noticeable increase in TSR inventory at the Shanghai Futures Exchange (SHFE). However, international supply continued to be tight, driven by wintering conditions in major producing areas such as Thailand, Vietnam, and Africa. TSR stock levels remained xx% lower than in March 2024.

The stockpiling of natural rubber (NR) in anticipation of China's wintering season resulted in a xx% month-on-month rise in inventory levels. 

Source: SHFE & Helixtap analytics

The global economy is encountering challenges, and as trade barriers become more pronounced, China's rubber market continues to experience significant pressure. Short-term fluctuations in trade and inventory are anticipated; however, long-term stability hinges on government interventions, geopolitical developments, and the recovery of demand in the automotive sector.