Market sentiment was “Bullish” - Helixtap sentiment tracker 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2,200/mt FOB Bangkok Laem Chabang
• Helixtap assessed SIR20 US$2,080/mt FOB Belawan Surabaya
• Helixtap assessed AFR10 US$2,030/mt CFR Hamburg Rotterdam
• Helixtap implied AFR10 US$1,990/mt FOB Abidjan

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material 28,000IDR/kg ex-works
• Helixtap assessed Thai raw material 62.5THB/kg ex-works
• Helixtap assessed Bulk latex US$1,565/mt FOB Bangkok Laem Chabang

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1,990/mt FOB Ho chi minh
• Helixtap assessed SMR20 US$2,080/mt FOB Klang Penang
• Helixtap assessed TSR 20 US$2,080/mt CIF China

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2,090/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2,200/mt FOB Belawan Surabaya

Daily Commentary: Rubber Market Tightens as Speculative Optimism Outpaces Demand

The rubber market continues its upward trajectory, fueled by speculative sentiment and persistent supply constraints. November 2024 set the stage for this rally, with TSR20 futures climbing steadily on the SGX. Prices hovered around 2,100 USD/MT for P2 (Feb 2024) contracts as of December 3, reflecting a sharp increase from earlier in November. While bullish sentiment persists, demand fundamentals remain weak, prompting questions about the sustainability of the rally.

Source: Price Signal, Differentials Tab

Source: Price Signal, Differentials Tab

The rubber market has exhibited notable price movements over the past month, with STR20 and SIR20 prices reflecting strong upward momentum despite subdued demand. STR20 saw sharp price increases, peaking mid-November before stabilizing, driven by tight supply due to heavy rains in Thailand. SIR20 exhibited a more volatile trajectory over the past month, with prices fluctuating as demand remained weaker compared to Thai STR20. 

The rising 20-day, 50-day, and 200-day moving averages underscore persistent bullish sentiment, though market fundamentals remain fragile. Buyers are cautious, with limited forward commitments, reflecting ongoing uncertainty despite speculative optimism surrounding Chinese stimulus measures and improved global economic indicators.

Weather Disruptions Amplify Supply Constraints

The supply-side pressures driving this rally stem largely from adverse weather in Thailand, the world’s leading rubber producer. Heavy rains throughout November disrupted tapping activities, leading to reduced availability and higher raw material costs. Thai cup lump prices reached THB62–63/kg, while field latex prices hovered at THB 69–71/kg. 

Demand Remains Subdued Despite Price Increases

Despite the upward momentum in prices, demand fundamentals remain muted. Buyers, including tire manufacturers, are largely sidelined, deterred by elevated costs and market volatility. Forward bookings are sparse, with traders focusing on prompt shipments to mitigate risks. In China, optimism about upcoming stimulus measures has not yet translated into significant buying activity. STR20 mixture cargoes traded at US$2085–2090/mt CIF, but forward interest remains minimal as participants await clarity on the stimulus package.

Chinese buying continues, but for cargoes further out. This could indicate they are well stocked in the near term. Indonesian shipments to China fared well, probably as they were priced competitively. 

EUDR delay, impact on NR market

The recent EUDR developments provide traders and suppliers with additional lead time to ensure compliance, offering some relief to those still adapting their processes. However, for operators already prepared to meet the December 30, 2024, deadline, expectations of securing higher premiums for early compliance may need to be tempered as the playing field becomes more even.

Regionally, the regulatory shift could rebalance the market. Countries like Indonesia, Malaysia, and Vietnam, which have lagged behind leaders like Ivory Coast and Thailand in terms of compliance readiness, now have an opportunity to catch up. This leveling effect could reduce disparities in trade competitiveness and bring more stability to the market, especially in light of anticipated tariffs in 2025. For traders, this dynamic creates both challenges and opportunities to optimize supply chains and pricing strategies in the evolving regulatory environment. More details here. 

Source: Customs Data, Helixtap Analytics

China's demand for Indonesian rubber remains closely tied to its price sensitivity, as Indonesia typically offers lower-cost grades like SIR20 compared to Thai STR20. The chart reflects cyclical purchasing patterns, with demand surging during periods when Indonesian rubber provides a cost advantage. 

Recent months show a rebound in export volumes, likely driven by Chinese buyers capitalizing on Indonesia's competitive pricing amidst rising global rubber costs. This trend underscores China's preference for Indonesian rubber as a value-driven alternative, particularly when high prices from Thailand and Africa reduce their appeal.

Outlook: Sentiment-Driven Rally Faces Fragile Fundamentals

While the current rally is underpinned by supply constraints and speculative optimism, the lack of strong demand fundamentals introduces significant risks. Forward market activity remains subdued, and key buyers are reluctant to commit amid ongoing volatility, with many being on the sidelines in the physical market when there were big sudden movements.

Traders should monitor developments in Thailand’s weather, the impact of China’s stimulus measures, and shifting automotive trends to navigate this uncertain landscape effectively. The potential for a correction looms large if demand fails to align with current price levels. For now, the market appears to be walking a fine line, with sentiment driving short-term gains but fragile fundamentals threatening to undermine long-term sustainability.

Notifications: 

• Please note that Helixtap will publish the assessments on December 24 at 12 pm SGT.

• Helixtap will not publish any assessments from December 26 – December 31, 2024. We will resume the publication of the assessments on January 2, 2025.

 Stalemate continues in market, spot northbound  

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2170/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$2030/mt FOB Belawan Surabaya, up US$5
• Helixtap assessed AFR10 US$2000/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1960/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2070/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2130/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The upward bias continued in the spot market, but the pace of the rally slowed down during the day. The anticipation around the prices kept the buyers sidelined, with more clarity expected next week. 

Buyers mostly sidelined this week

The surge in the prices this week kept the tiremakers away for most of the trading days in the international market. Some buyers have noted that the unprecedented spike in the market has prevented them from booking shipments.

While the uptick in the market is largely sentiment-driven owing to the upcoming Chinese stimulus announcement and rains in Thailand, the demand has not seen any revival yet. 

While some offers were present in the market, they primarily served as price indications rather than firm offers. Thai raw material prices continued to rise amid restricted tapping activities. The Thai cup lump prices moved up to around THB61-THB61.5/kg, while field latex prices hovered in the range of THB70-THB71/kg.

However, a public holiday in Thailand limited the TSR offers, further dampening market activities.

The market conditions in Indonesia, however, were slightly different, as the tepid buying impacted the SIR prices more than the other grades. Over the year, demand for Indonesian rubber has been slowing down, and with the recent surge, producer sources have noted a further decline in market interest.

According to a producer source, the market is oversupplied, which is why the prices of rubber in Indonesia are not as high as those in other regions.

Forward market bearish; Chinese arb buying restricted to nearby month

With the improvement in the weather conditions, the supply is likely to ease. In addition, given the disappointing recent Chinese stimulus announcement, the buyers in China are restricting the bookings largely for the prompt shipments. 

There were trades for prompt shipments of the STR 20 mixture in the range of US$2085–US$2090/mt on a CIF basis, while there was some interest from the SMR 20 mixture as well, which traded in the range of US$2065–US$2070/mt on a CIF basis. 

A trader source noted that the bearish take for the forward months has limited the traded volume in the market. There was some interest from the end users, but that  was limited from prompt shipments. A Singapore-based source added that the market participants are unwilling to take risks given the volatility this year.

Recalibration in the Chinese EV sector 

Meanwhile, Chinese automakers intend to increase their exports of hybrid vehicles to Europe in an attempt to evade the constraints of the European Union's electric vehicle tariff framework. The implementation of EU tariffs, reaching as high as 45.3% on imports of Chinese electric vehicles, commenced in late October.

The recent tariffs imposed to protect the automotive sector do not apply to hybrid vehicles. Some of the major Chinese brands are thus expected to continue their expansion in the region via hybrid vehicles.

On the other hand, sales of China-made electric vehicles by Tesla experienced an annual decline of 4.3% in November, underscoring the rising competition in the EV segment.

Notifications: 

• Please note that Helixtap will publish the assessments on December 24 at 12 pm SGT.

• Helixtap will not publish any assessments from December 26 – December 31, 2024. We will resume the publication of the assessments on January 2, 2025.

Market upbeat for more strength in spot; demand tepid 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2160/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$2025/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1990/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1950/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2060/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2125/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Upbeat market sentiments kept the spot prices northbound during the Asian trade day driven by the weather conditions in Thailand. Even though the pace of the surge slowed down compared to the previous day, the sentiment continued to remain upbeat, albeit nudging the buyers away from the market. 

Sentimental support for spot is not fundamental

The spot market continued to rally despite limited demand. The ongoing rains in Thailand have kept the prices buoyant. While some Thai producers noted that the supply is likely to tighten further as weather conditions have not improved yet. "We anticipate more rain in the upcoming days," a producer source stated.

The surge in Thai cup lump and field latex prices continues to impact the TSR pricing level. Even though the rain in the last quarter is seasonal, the cumulative impact of unexpected heavy rains over the past year has amplified the impact on the market sentiment. 

As a result, the prices have moved up across the board. According to Helixtap market sources, the market observers are expecting the prices to move up by another US$200–US$300/mt next year. However, given the ongoing demand situation, the prediction may be considered "too optimistic".

Given the upward trend in prices, several major tire manufacturers have chosen to remain out of the market. A trader source observed that despite some inquiries, the market remains extremely quiet, primarily due to the need to monitor price levels.

Producers also displayed a similar attitude, with some feeling hesitant to make an offer given the current market conditions. There were some indicative offers for SIR 20 in the range of US$2040-US$2050/mt on a FOB basis, but no firm offers emerged.

According to the Rubber Authority of Thailand's estimates, ongoing weather conditions can disrupt tapping activities for over a month. However, no producers have declared an official force majeure, suggesting that the situation has not deteriorated yet.

China slightly slower during the day 

Following an initial surge in trading activity the previous day due to reports of the Chinese stimulus announcement next week, the pace of Chinese buying slowed down slightly during the day. Arbitrage buyers continued to dominate the buying, but the traded level was slightly lower than the previous day.

On a CIF basis, STR 20 mixture cargoes reportedly traded in the range of US$2080-US$2085/mt. Expectation for more stimulus support next week has been keeping the market sentiment upbeat. 

Some Indian buying interest 

Meanwhile, some movements of African rubber were observed into the Indian market. There were trades for AFR 10 to India in the range of US$1980-US$1990/mt on a CIF basis, which is better than the levels seen in the Chinese market. 

The increase in raw material costs significantly impacted the profit margins of Indian tire manufacturers during the second quarter of FY 2024-2025 (July 2024 to September 2024). In response, these companies turned to substantial imports of compound rubber from Southeast Asia to mitigate the effects of rising domestic natural rubber prices.

There is no longer a "no risk" category in EUDR

Meanwhile, the trialogue between the European Council, Commission, and Parliament has dropped the no-risk category on the EUDR front. The provisional agreement confirms the one-year delay in EUDR implementation. The market now awaits the final decision later this month.

Spot rally on China’s stimulus anticipation & Thailand weather condition

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2150/mt FOB Bangkok Laem Chabang, up US$45
• Helixtap assessed SIR20 US$2015/mt FOB Belawan Surabaya, up US$40
• Helixtap assessed AFR10 US$1980/mt CFR Hamburg Rotterdam, up US$40
• Helixtap implied AFR10 US$1940/mt FOB Abidjan, up US$40

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2050/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2115/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The news of China's stimulus announcement next week, coupled with the ongoing rains in Thailand, triggered a northbound trend in the spot market during the Asian trade day. In the meantime, market participants chose to remain out of the market as they attempted to assess the future course of events.

Spot market activities muted 

There were hardly any offers or bids in the physical rubber market during the day, as the prices continued to drive north. Amid a lack of support from demand, the nudge to the market was largely sentiment-driven, which heightened the volatility in the market. 

A producer source noted that the market's uptick could be triggered by China's stimulus meeting next week. He added that they were not keen on offering in these market conditions, as it is difficult to judge the way forward. 

There were some inquiries for cargoes, but no serious bids in the market, as buyers were trying to judge the availability rather than the price level. 

Industry reports indicate that China will convene a meeting next week to establish economic objectives and stimulus strategies for 2025. Falling producer prices and declining orders preceded the strong PMI data for October and November, indicating that the stimulus announcements are boosting market confidence.

Furthermore, the stronger-than-expected October trade data highlights a tendency to prioritize exports ahead of any future tariff announcements from China. Consequently, the year-over-year increase in tire exports was approximately 11.2%.

Source: Helixtap analytics & Customs data

The central bank has pledged to provide monetary policy assistance to promote economic growth, anticipating potential obstacles on the tariff front. Meanwhile, market observers are concerned about the subdued economic growth and the potential impact of US tariffs, which could heighten market volatility.

Thailand rains and it’s impact 

The heavy rains in Thailand are a significant factor influencing market prices. Although opinions on the severity of the situation vary, some predict a significant impact due to the cessation of tapping activities in certain regions.

With the overall bearishness in demand, there have not been any reports of defaults or delays, but the authorities in Thailand are on high alert for more intense rainfall after days of monsoon rains triggered devastating floods. There is a possibility of more heavy rains through the week, putting certain areas further at risk of flash floods.

A trader source noted that the weather situation is adding to the upward trend in the market.  Since it's the monsoon season in Southeast Asia, Thailand, Indonesia, and Vietnam are currently experiencing rain. However, the magnitude of the rains in Thailand is higher than anticipated. 

However, this could potentially benefit the yield next year, leading to timely wintering, in contrast to this year's early wintering caused by dry weather conditions.

 Strong Chinese data perks up spot 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2105/mt FOB Bangkok Laem Chabang, up US$25
• Helixtap assessed SIR20 US$1975/mt FOB Belawan Surabaya, up US$25
• Helixtap assessed AFR10 US$1940/mt CFR Hamburg Rotterdam, up US$25
• Helixtap implied AFR10 US$1900/mt FOB Abidjan, up US$25

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2010/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2075/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Expansion in the Chinese factory activities coupled with the recent disruption in production in Thailand lent support to the physical rubber market during the day. Meanwhile, the buyers were still cautious and opted to stay on the sidelines.

Caution prevails among buyers and sellers

The apprehension among the buyers amid northbound physical prices kept the buying largely limited. Various sources noted that December lull has hit the market because there is hardly any buying interest. 

Meanwhile, the surge in raw material prices following the recent rains in Thailand has prevented producers from lowering their offers. While Thai cup lump prices continue to surge, there has been an uptick in Indonesian prices as well. 

Some market sources noted that the Indonesian cost averages at around US$1950-US$1960/mt, so the producers are not too keen to offer below US$2000/mt on an FOB basis. However, the uncertainty surrounding the demand outlook is weighing on trading activities. 

Even in China, there was limited buying interest. There were some trades for the STr 20 mixture reported in the range of US$2025-US$2030/mt on a CIF basis against the offers of US$2060-US$2070/mt on a COF basis. A trader source noted that the buying interest was primarily for the nearby months, and added that the producers were unwilling to offer at similar levels for the forward months.

Meanwhile, there were some higher offers for SVR 10 as well, which hovered between US$2080 and US$2100/mt on an FOB basis. These higher offers are unlikely to attract any interest in the international market, particularly given the increased competition from SIR 20 in the market. However, another trader source pointed out that domestic end-users primarily purchase Vietnamese rubber amid a "dead" status of the international market. Market participants attributed the “unrealistic SVR offers” to higher raw material costs. 

Macro factors impacting the sentiment 

Amid a lack of buying, the market was largely driven by the macro factors at play, and expansion in Chinese factory activities in November was the key trigger. In November, China's factory activity expanded, driven by a series of stimulus measures coupled with escalating trade threats from the US.

The sentiment within China's manufacturing sector has remained subdued for several months, attributed to declining producer prices and a reduction in orders. However, the recent two months of positive PMI indicate that the stimulus measures are percolating in the market.

However, other Asian countries, like Japan, India, Malaysia, Thailand, and Indonesia, witnessed a slowdown.  In addition, increased US tariffs may pose risks to China's industrial sector in the coming months. This is contributing to the increased caution among market observers.

While US dollar policies and tariffs can influence supply and demand dynamics, a producer source added that no direct causation is evident at this time because it's still too early to say.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Better China tender price supports spot 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2080/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1950/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1915/mt CFR Hamburg Rotterdam, up US$15
• Helixtap implied AFR10 US$1875/mt FOB Abidjan, up US$15

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,750/kg ex-works, down IDR 1500
• Helixtap assessed Thai raw material THB 59/kg ex-works, up THB 2
• Helixtap assessed Bulk latex US$1550/mt FOB Bangkok Laem Chabang, up US$50

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1950/mt FOB Ho chi minh, up US$80
• Helixtap assessed SMR20 US$2060/mt FOB Klang Penang, up US$90
• Helixtap assessed TSR 20 US$2035/mt CIF China, up US$65

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1985/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2050/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Better than expected China's tender prices bolstered the sentiment of the spot market during the Asian trade day, further supported by the deteriorating weather conditions in Thailand.

Meanwhile, Indonesian raw material prices witness a steep drop amid tepid demand. 

Chinese tender prices prop the market up

Better-than-expected Chinese tender prices kept the sentiment buoyant, muting the physical market activities amid a surge in spot prices. According to some market sources, the tender results are excellent, which is why the market is going up. 

According to Helixtap market intelligence, a total of 40,000 mt was sold out of the 120,000 mt tendered. Out of 100,000 mt of RSS3, only 30,000–32,000 mt were sold.  Despite the limited volume sold, the sentiment remained unaffected due to the higher transacted levels. The transacted level for SCRWF was in the range of Yuan 13300–Yuan 13500/mt (US$1836–US$1864/mt), and for RSS 3, the transacted level was around Yuan 18900–Yuan 19100/mt (US$2610–US$2637/mt).

The market participants were anticipating a response following the price announcement. Given the ongoing bearishness in the demand outlook, this reaction is crucial at the moment. The initial tender announcement had a limited impact on the market.

China is expected to replenish its reserve stock following the liquidation of the remaining inventory. This is anticipated to offer a stabilizing influence on the market during that period. The market is projecting an early restocking from China, influenced by the upcoming Lunar New Year holidays in January of the following year. The traded level for the STR 20 mixture inched up considerably, ranging between US$2030 and US$2035/mt on a CIF basis. 

Thai weather conditions worsen 

The deteriorating weather conditions in Thailand have raised concerns among market observers, as some anticipate further deterioration. A Thai producer source stated that the situation is currently deteriorating and could worsen if the rain continues.

However, he noted that despite the rains only affecting the south of Thailand, they would have a significant impact, given that the south accounts for around 80% of Thailand's rubber production. Market sources have indicated that the flood situation in Thailand is becoming increasingly severe, leading some local producers to suspend factory operations for the remainder of the week.

Indonesian raw materials witness a steep correction. 

Unlike the situation in Thailand, the collapse of Indonesian cup lump prices was caused by a lack of demand. According to Helixtap market sources, the gap between factory and farmgate prices has narrowed considerably. 

Even though there are reports of heavy rains in Sumatra, the weakness in demand has massively impacted the raw material prices. Some producer sources noted that the supply would resume as the rain eases, as rains are always beneficial for rubber. 

Rains in Thailand nudged spot up, production impacted in south

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2060/mt FOB Bangkok Laem Chabang, up US$30
• Helixtap assessed SIR20 US$1935/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1900/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1860/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2035/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Heavy rains in the south of Thailand impacted production, driving up raw material prices during the Asian trade day and keeping the spot market northbound. However, some market sources believe that tepid demand and the impact of rains restricted to a part of Thailand would prevent any further escalation. 

Raw material short again 

Bad weather conditions hit the market, continuing the trend that began in 2024. Limited buying interest weighs on the market sentiment as heavy rains in the south of Thailand begin to impact the supply.

While the market activities remained limited as buyers opted to stay on the sidelines, the worsening weather conditions tightened the supply for Thai rubber. Some market sources noted that the flood condition in Thailand is getting slightly serious, with some Thai producers being forced to shut factories for the rest of the week. 

Thai raw material prices, as a result, inched up during the day, with cup lump prices around THB 59.5–THB 60.5/kg and field latex around THB 67.5–THB 69/kg. Some market sources noted that this could be a nudge for the buyers, as the shortage might result in some panic buying. 

While the offers for STR 20 mixture ranged from US$2050-US$2060/mt on a CIF basis, the offers for STR 20 inched up to around US$2080-US$2090/mt on an FOB basis. There was very limited buying interest from China as well, with a few trades reported in the range of US$2000–US$2010/mt on a CIF basis. 

However, unlike the conditions seen earlier this year, the rains are largely restricted to the south of Thailand, which is likely to partially impact the production. Meanwhile, the Thai Meteorological Department has issued a warning for heavy to very heavy rainfall across thirteen Southern provinces, advising them to prepare for potential flash flooding as weather conditions worsen. In addition, there were indications of a transition from cool to cold temperatures across the northern regions.

Floods in Indonesia 

There have been reports of heavy rains in North Sumatra, which could potentially impact the rubber production if the weather conditions do not improve. Heavy rainfall since November 23 has impacted four districts in northern Sumatra, resulting in severe flooding and landslides. Climate change has intensified and reduced the predictability of recent extreme weather events in Indonesia.

The lack of offers from producers also discouraged regular buyers from entering the market. However, Indonesian farmgate prices, weighed down by the tepid demand, continued to move south, clocking a month-on-month drop of 5%. 

Spot firm ahead of the China’s tender results 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2030/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1920/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1890/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1850/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1960/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2020/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The spot market continued with northbound movement during the Asian trade day ahead of the Chinese tender results due November 28, keeping the market participants apprehensive. Meanwhile, some strength in the US dollar and rains in Thailand also supported the physical prices. 

Buoyant spot prices but buying muted 

While there was some strength in the spot prices, the buying interest slowed over the day. Helixtap market sources report that there were some inquiries during the day, but they dwindled later in the day.

The market participants were puzzled as there is hardly any support from the market fundamentals for the prices to strength. A trader source noted that there are no fundamentals to support the current strength, and the firmness is more predominant in the futures market than the physical market. He added, "It appears to be a speculative move."

Part of the speculation may stem from the Chinese tender results, which are expected on November 28 and pertain to the stocks scheduled for rotation. Helixtap market intelligence suggests that China plans to tender reserve rubber, which includes 100,000 metric tons of RSS and 20,000 metric tons of SCRWF. The market is expected to experience some degree of impact; however, it is essential for market participants to comprehend the price level at which offerings are being made.

Meanwhile, China's price level remained largely rangebound, with the traded level of the STR 20 mixture hovering between US$2000 and US$2010/mt on a CIF basis. The buying interest has shifted towards forward months. However, the buying was largely restricted to arbitrage buyers this week. Regarding the tire makers, their interest is primarily focused on the upcoming months, suggesting that they may have already stocked up for Q1.

During the day, offers for SIR 20 on the international market ranged from US$1930 to US$1935/mt on a FOB basis. However, some sources noted that, despite being a public holiday in Indonesia, there were some producers on the market.  The buyers, nevertheless, opted to move to the sidelines after some inquiries earlier in the day. 

In addition, reports of rains in the south of Thailand are also impacting the pricing sentiment. Even though the market supply is not as tight as it was earlier this year, the prices are more susceptible to weather. 

Macro factors weighing on market psyche

Meanwhile, concerns regarding tariffs and the U.S. deficit are currently influencing market sentiment regarding the Federal Reserve's capacity to implement significant rate cuts.

On the other hand, China's October industrial profits experienced a decline, although the decrease was less pronounced compared to the prior month. This trend was attributed to ongoing deflationary pressures, coupled with persistently weak demand. The possibility of increased U.S. tariffs also poses risks to China's industrial sector in the upcoming year, potentially leading to a decline in export revenues.

Due to a prolonged property crisis and weak domestic demand, the extensive sector has struggled to maintain profitability. However, there is optimism that with the implementation of additional policy easing, the situation may improve in the upcoming year.

Spot braces for volatility as Trump’s tariff drive 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2020/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1910/mt FOB Belawan Surabaya, up US$5
• Helixtap assessed AFR10 US$1880/mt CFR Hamburg Rotterdam, down US$5
• Helixtap implied AFR10 US$1840/mt FOB Abidjan, down US$55

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1950/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2010/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The onset of the expected tariff battle between the US and China drove the spot rubber up during the Asian trade day, heightening the uncertainty and volatility in the market. The buyers thus opted to stay on the sidelines. 

US-China tariff war 

Donald Trump has announced significant tariffs targeting Canada, Mexico, and China, which are likely to initiate trade conflicts. As per the industry reports, Trump plans to implement a 25% tariff on imports from Canada and Mexico. In addition, Trump specified implementation of an "additional 10% tariff, above any existing tariffs," on imports originating from China. The implications for China remain somewhat ambiguous at the moment.

Trump's broader imposition of tariffs during his 2017-2021 presidency kicked off a tariff war with China. After the introduction of tariffs in 2019, the United States saw a notable reduction in tire exports, registering a 55% drop in exports for 2019 relative to the previous year. The robust demand from markets such as Europe and the Middle East, along with a comparatively stronger economy, alleviated the impact on rubber demand.

The recent extension of countervailing and antidumping duties on tires suggests that the potential for increased tariffs may have a substantial effect on Chinese export levels. The market for Chinese goods is experiencing constraints as additional regions, including Canada and the European Union, engage in the tariff conflict.

In addition, a number of Asian and Chinese auto majors were looking at Mexico as an alternative low-cost hub to export into the US market. Therefore, this decision would have a significant impact on the auto sector, which in turn could influence the demand for rubber. The market is likely to see more volatility with Trump’s win, noted a producer source. 

Caution across the board 

Meanwhile, buyers exhibited widespread caution, which muted the physical market activities. While there were some trades reported during the day, the tire majors opted to stay on the sidelines. 

There were trades for SIR 20 in the range of US$1910–US$1915/mt on an FOB basis, slightly better than levels seen the previous day. However, some sources noted that there were also lower offers in the market, suggesting a desperation among the sellers to liquidate.

Meanwhile, ongoing long-term negotiations have lent a way for the producers to move their volume amid the bearishness in the spot market. Market sources noted that the market at present is a buyers’ market, which limits the scope of hard negotiations at the seller's end. 

The Chinese market also remained muted during the Asian trade day. We observed a similar trend, with market prices correcting throughout the day, highlighting the sluggish market conditions. Even though some trades for STR 20 were reported during the day at a price of US$1990-US$2000/mt on a CIF basis, which was higher than the previous day, the volume traded remained limited. The arbitrage buyers primarily observed the buying, shifting their focus from short-term positions to long-term assets.

Buying slows amid firm spot prices 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2010/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1905/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1885/mt CFR Hamburg Rotterdam, up US$25
• Helixtap implied AFR10 US$1845/mt FOB Abidjan, up US$25

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1955/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2005/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The buying slowed down during the Asian trade day amid some strength in the prices, keeping the market volatile. While the raw material prices have seen some correction lately, they continue to be at an elevated level. Therefore, a steeper correction in raw material prices is crucial for producers to survive in a downward market.

Buying muted 

The buying was largely muted owing to some strength in the prices. Following last week's correction, the international market experienced a slight improvement in inquiries. However, some sources reported that while there were inquiries in the market, they were not indicative of aggressive buying interest.

There were trades for SIR 20 in the range of US$1900–US$1910/mt on an FOB basis, slightly better than Friday levels. Despite the limited support from the fundamentals, some analysts believe the market is experiencing some technical strength.

The Chinese market also slowed down amid the surge in the international offers. According to market sources, the traded level saw some correction over the day amid diminishing buying interest. On a CIF basis, the traded level for the STR-20 mixture hovered in the range of US$1950-US$1965/mt. 

There was some uptick in buying from the Chinese tire makers last week, owing to the correction in the prices. However, the upward bias in the prices kept them on the sidelines during the day. Today, a trader source noted that buyers were primarily focusing on switching from near-term positions to long-term goods.

Raw material prices are still high

The seesaw movement in the market is likely to continue in the coming weeks. A producer source noted that while the long-term negotiations are ongoing, the market is unlikely to see a steep drop. Following the delay in the implementation of the EUDR, producers are attempting to increase the volume of their contracts.

Given the volatility in 2024, it could be advantageous for buyers to book a reasonable volume under a term contract.

The shortage of raw materials and the subsequent surge in prices were the key factors driving this year's volatility. Compared to early 2024 levels, the raw material prices are still elevated, despite the recent correction. 

According to Helixtap data, Indonesian cup lump farmgate prices are around 22% higher than the levels seen in earlier January. Meanwhile, the heavy rains in the south of Thailand have impacted the supply again, nudging the prices up. Thai cup lump prices are around 25% higher than the early 2024 levels. This is likely to cap the producer’s scope to adjust the prices downward. 

EUDR tension continues

The EU lawmakers have voted to effectively exempt most member states from the law prohibiting the sale of commodities grown on deforested land within the bloc, amidst ongoing uncertainty surrounding the "no risk category". This is unlikely to sit well with the producers outside the EU region. 

The agricultural lobby in Brazil has expressed concerns regarding the new clause, highlighting its reinforcement of the law's perceived discriminatory nature toward nations outside the EU. It would impose additional challenges on nations such as Brazil, Indonesia, and Malaysia, which possess forests and are currently experiencing agricultural growth. 

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

More correction spot anticipated next week

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1990/mt FOB Bangkok Laem Chabang, down US$30
• Helixtap assessed SIR20 US$1890/mt FOB Belawan Surabaya, down US$30
• Helixtap assessed AFR10 US$1860/mt CFR Hamburg Rotterdam, down US$30
• Helixtap implied AFR10 US$1820/mt FOB Abidjan, down US$30

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 27,250/kg ex-works, down IDR 750
• Helixtap assessed Thai raw material THB 57/kg ex-works, down THB 1
• Helixtap assessed Bulk latex US$1500/mt FOB Bangkok Laem Chabang, steady

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1870/mt FOB Ho chi minh, down US$60
• Helixtap assessed SMR20 US$1970/mt FOB Klang Penang, down US$30
• Helixtap assessed TSR 20 US$1970/mt CIF China, up US$25

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1930/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya

Market sentiment was “Slightly bearish” - Helixtap sentiment tracker 

The bearish note in the physical rubber market during the Asian trade day continued to keep the prices volatile. As the news of the Chinese stock rotation spreads, market participants anticipate further corrections in the upcoming week. Meanwhile, rains in Thailand tightened the supply. On the other hand, amid limited demand, Thailand opted to halt offers for EUDR cargo. 

Spot trend bearish

The day's market activities remained largely muted due to the ongoing volatility. While the market attributed this to the news of China's stock rotation due next week, others believe the key bottleneck has been the bearish demand.

The buying activity in all markets has slowed down due to market caution. Both sellers and buyers were uncertain about where to set the market price. The news of the Chinese stock rotation heightened the bearish mood in the market following the EUDR delay.

It is evident that the market sentiment is likely to be affected; some market sources have noted a significant slowdown in Chinese buying, and they anticipate further downward pressure on prices next week. On a CIF basis, the reported traded level for the STR 20 mixture was in the range of US$1960-US$1970/mt. “The market is probably reacting to the China stockpile release,” said a Singapore-based source.

The trend was also observed in international buying. Apart from some regular buyers, there was minimal interest in the spot market. As a result, the SIR 20 traded level saw a significant intra-day drop, with trades reported at around US$1890/mt on a FOB basis. 

Thai raw material supplies tighten again 

Meanwhile, weather conditions worsened in South Thailand, impacting tapping activities there.  According to Helixtap market intelligence, there was a flash flood today in Patthalung and Nakorn Sri Thammarat. 

A Thai producer source noted that there is heavy rainfall in southern Thailand, so the supply is rather tight. Thai cup lump prices were in the range of THB 56-THB 57/kg. There was more support for field latex, which hovered in the range of THB 67-THB 68/kg owing to tight supply. 

The Thai Meteorological Department has released an advisory regarding severe thunderstorms projected to impact the southern region. The forecast indicates the likelihood of heavy rainfall, strong winds, and turbulent sea conditions from Thursday through Saturday.

Meanwhile, the prices of Indonesian cup lumps stabilized during the week. Amid tepid demand and weak market cues, Indonesian farmgate prices saw a week-on-week correction of around 4%. 

Halt in Thai EUDR cargoes surprises buyers 

While spot demand remained, some buyers still interested in the EUDR cargoes are struggling to find shipments, as some sources noted that Thailand has stopped offering them. While some Thai producer sources noted that the move was logical given the delay, they also noted that there would not be much demand in the coming months. Therefore, there is no purpose in introducing it to the market.

However, some market sources noted that some of the European and US tire makers continue to inquire for EUDR rubber. This is an attempt by the tire makers to support the producers/suppliers who have invested in preparing for the implementation by the end of the year. However, the premium levels are significantly lower than the levels seen earlier this year. 

The market is likely to see a lull in the EUDR space in the first quarter of the year. However, given the new implementation date this year, it is likely that activities for EUDR rubber will pick up by mid-2025. Despite this, the premiums would continue to decline.

The market anticipated the delay after the European Commission’s initial proposal in mid-October. As a result, the delay had a limited impact on prices, as the market adjusted the premium levels accordingly. As per Helixtap analytics, the premium level has seen more than 50% drop since May.

China back to roll old stock; spot firm on strong USD

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2020/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1920/mt FOB Belawan Surabaya, up US$20
• Helixtap assessed AFR10 US$1890/mt CFR Hamburg Rotterdam, up US$20
• Helixtap implied AFR10 US$1850/mt FOB Abidjan, up US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1960/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2020/mt FOB Belawan Surabaya

Market sentiment was “Slightly Bullish” - Helixtap sentiment tracker 

The market saw limited impact around the reports of Chinese stock rotation during the Asian trade day. Meanwhile, a stronger US dollar supported spot prices, it also weighed on buying sentiment.

China is back to rotating old stocks

Reports indicated that China is scheduled to tender the rotation of old stocks next week, but this did not significantly impact market sentiments. Market sources noted that once the volume hits the market, there would be some downward pressure on the market.

According to Helixtap market intelligence, China will tender reserve rubber, which would have 100,000 mt of RSS and 20,000 mt of SCRWF. The tender date is November 28. The market will be affected to some extent, but it is crucial for the market to understand the price level at which it is being offered, according to a source based in Singapore.

The news was well-absorbed by the market, with no direct impact on the already bearish market. According to a producer source, China will need to replenish its reserve stock after liquidating the remaining stock. This is expected to provide support to the market at that time. Additionally, the market anticipates early restocking from China due to the Lunar New Year holidays in January of next year.

The pegged price level determines the magnitude of the impact. In September, China successfully sold the majority of TSR stock, but only partially, accounting for around 4% of the total RSS. This was due to a price range of RMB 18,600-RMB 18,650/mt (US$ 2620-US$ 2630/mt).

More than 50,000 tons of smoke sheets went unsold in the second round. China always has limited demand for RSS, as evidenced by its inability to move much volume in the two rounds.

This could further cool off the prices before the Chinese tire makers come back to the market to restock. Lately, there has been a shift in arbitrage buying toward SBR in China, given the wide price gap between rubber and synthetic rubber. Meanwhile, the rubber inventory level is largely stable in China. 

Chinese buying usually slows down in the fourth quarter, and given the rising tariff battle with the West and the faltering economy despite stimulus, the demand from China is expected to be slow.

The spot is firm, but market activity is muted; focus on LTC

Meanwhile, the strength in the US dollar lent some support for the international spot prices. However, it impacted the buying sentiment. There was caution among the buyers and sellers as they were unable to assess the market levels.

However, on the back of some regular buying, the prices inched up. The buying interest for SIR 20 during the day was around US$1920/mt on a FOB basis, which was at par with the offer level. Most sellers are not eager to sell at these levels, which in turn has limited the number of offers available in the market.

Producer sources noted that the spot market is sluggish, which has diverted the seller’s focus to the term contract negotiations. 

Meanwhile, due to a stronger US dollar, Chinese buyers slowed down their purchases of international cargoes and shifted their focus to shipments traded in Chinese yuan. There was a slight dip in the traded level for the STR 20 mixture, which was in the range of US$1970-US$1980/mt on a CIF basis. The market is cautious around the Fed's stance on rate decisions in the near term. 

Impasse in spot market, sellers bewildered

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2000/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1900/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1870/mt CFR Hamburg Rotterdam, up US$5
• Helixtap implied AFR10 US$1830/mt FOB Abidjan, up US$5

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1940/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2000/mt FOB Belawan Surabaya

Market sentiment was “Neutral” - Helixtap sentiment tracker 

A slight uptick in the market sent the buyers back to the sidelines, resulting in muted market movement during the Asian trade day. The widespread caution in the market has been a major deterrent for prices to stabilize. 

Chinese activities muted, despite stimulus support 

Despite some uptick in the futures market, the Chinese buying interest remained largely muted. Interest in international cargoes, particularly those traded in US dollars, was extremely limited. A trader source reported that there was limited trading volume for STR 20 mixture in the forward months, with prices ranging from US$1990 to US$2000/mt on a CIF basis. The buying interest was largely for Chinese yuan-priced physical cargo. 

Although there was some strength in industrial-related futures in China, this did not translate into a physical demand for rubber. "It appears that the property sector is receiving support," a Singapore-based source stated, noting that this support did not facilitate the rubber market.

Meanwhile, others believed the uptick in the futures was largely technical recovery rather than any sentimental support from various macro factors. The market fundamentals remain weak, as buying is largely opportunistic. 

China has established a growth target of approximately 5% for 2024. However, projections from market experts indicate that China may experience growth below the 5% mark despite the recent initiatives aimed at stimulating the economy. Since late September, Chinese authorities have significantly increased the implementation of stimulus measures.

International buyers sidelined, sellers perplexed 

During the Asian trade day, the market saw limited inquiries from major international consumers. The seller's confusion in assessing a fair value was evident from the wide range of offers. Offers for SIR 20 ranged between US$1930 and US$1945/mt on a FOB basis. “It is hard to say, a bit of a puzzle in today’s market,” said a producer source.

Market participants, like buyers, exhibited a prevalent sense of caution in the face of prevailing market uncertainties. The current market seems to be taking a cautious stance, perceiving price levels as unsustainable without further adjustments in raw material expenses.

Meanwhile, a source based in Thailand has noted that the government is attempting to support market prices in order to revive the economy following the EUDR delay.

Meanwhile, Ukraine's deployment of U.S. missiles against Russia affected market sentiment and lowered Russia's threshold for a potential nuclear response. However, concerns surrounding this situation appear to have lessened somewhat. As a result, oil prices modestly recovered, and rubber futures did the same.

The macroeconomic indicators are slightly bearish. Therefore, the market's expectations rely on the actions of the Fed and ECB. Without some support from market fundamentals, the market is likely to adopt a somewhat conservative approach.

Tilting Chinese buying interest towards SBR detrimental for rubber

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1990/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1890/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1865/mt CFR Hamburg Rotterdam, up US$5
• Helixtap implied AFR10 US$1825/mt FOB Abidjan, up US$5

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1935/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya

Market sentiment was “Neutral” - Helixtap sentiment tracker 

There was some uptick in Chinese buying interest towards synthetic rubber over natural rubber, which has spurred some concerns among market observers on the impact on an already southbound physical rubber price. 

Meanwhile, the steep correction in the physical rubber prices over the past few weeks resulted in a slight uptick in buying during the Asian trade day. 

Chinese skewed interest towards synthetic rubber

With the widening gap between synthetic rubber and natural rubber in the Chinese market, there has been a shift in the buyer's focus. 

Some market sources have noted that the recent downtrend in synthetic rubber prices has significantly widened the price gap between natural rubber and SBR (styrene-butadiene rubber). This has piqued the interest of some of the arbitrage buyers. 

“They are buying SBR and selling NR (natural rubber) instead, but we'll have to see if SBR is able to replace NR,” said a Singapore-based source. According to Helixtap market intelligence, synthetic rubber prices and its feed stock have moved down by 20% in the past 45 days. 

The Chinese tire industry needs to investigate whether SBR can effectively replace NR in tire plants. They will need to make adjustments to their ratio formula. In addition, a lot would depend if the weakness continues in SBR and the gap with rubber prices remains high and stable.

There were some offers for STR 20 mixture in the range of US$1980-US$1990/mt on CIF basis, which sources noted are higher for the Chinese buying expectation, which is around US$1920-US$1930/mt on CIF basis. 

Slightly active international market 

Numerous market sources reported more international inquiries during the day, boosting optimism. The physical rubber prices have seen a correction of around 5.5–6.5% since mid-October. 

While there are still a lot of uncertainties in the market, the correction has brought some buyers back. There were trades for SIR 20 in the range of US$1885–US$1895/mt on a FOB basis, slightly higher than the previous day. 

There is caution as market observers anticipate a number of political and policy decisions, especially from China and the US. In addition, the overall demand signals are bearish. According to a producer source, the market is currently in a bearish mode and is expected to experience brief spikes in demand.

Eyes on US and China’s decisions

There has been increased volatility in the market since the US presidential elections and Chinese stimulus announcement. While the Chinese stimulus failed to lend the support, Beijing and Shanghai have implemented tax incentives aimed at stimulating home purchases, as ongoing challenges in the property sector persistently hinder growth.

In addition, China is anticipated to maintain its benchmark lending rates. China has implemented a range of stimulus measures since late September, including monetary easing, fiscal initiatives, and support for the property market.

The market is also awaiting the cabinet selection process of Donald Trump to assess the implications for the trajectory of U.S. interest rates. Market experts perceive Trump's proposed fiscal spending, increased tariffs, and stricter immigration policies as inflationary.

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1,980/mt FOB Bangkok Laem Chabang
• Helixtap assessed SIR20 US$1,880/mt FOB Belawan Surabaya
• Helixtap assessed AFR10 US$1,860/mt CFR Hamburg Rotterdam
• Helixtap implied AFR10 US$1,820/mt FOB Abidjan

Market sentiment was “Bearish” - Helixtap sentiment tracker

Physical Prices Hold Steady Amidst Lower Futures

The physical rubber market held steady during the Asian trade day, despite a continued decline in futures prices. Sellers largely stayed on the sidelines, with limited activity in the spot market. A sense of caution pervaded among market participants following the European Parliament’s approval of a one-year delay in the EU Deforestation Regulation (EUDR).

Prices were notably lower across the board this week, reflecting weak demand and continued bearish sentiment.  However, some Thai traders Helixtap spoke to expecting prices to consolidate at this level. Offers for SIR 20 ranged from US$1,880–US$1,900/mt on a FOB basis. Similarly, STR 20 was traded at US$1,930 on a CIF basis to China for March, indicating that prompt demand is already fulfilled mostly.

Chinese demand continued to lag, with buyers hesitant amid ongoing market uncertainties. A producer source noted that "the market seems to be in wait-and-see mode," as prices are seen as unsustainable without further corrections in raw material costs.

LTC Discussions in Play After EUDR Announcement of 1-Year Delay

The announcement of the EUDR’s one-year delay has reignited discussions around Long-Term Contracts (LTCs) as market players reassess their strategies. Producers have expressed concerns that the delay could disrupt ongoing preparations and introduce further volatility into pricing mechanisms.

Some producers believe that LTCs could provide stability, especially in a market grappling with declining demand and global oversupply pressures. A Thai producer stated, "With the delay, there’s potential for LTCs to mitigate some of the risks, but buyers remain cautious."

Market participants also highlighted the potential impact on premiums for EUDR-compliant rubber, which could come into play in 2H of 2025. While some believe premiums may standardize, others argue they are already priced in, as evidenced by the lack of major movements in the spot market following the announcement.

“No Risk” Causes Some to Wonder if It’s a Loophole

The introduction of a “no risk” classification under the EUDR has sparked debate among industry stakeholders. This classification exempts countries deemed deforestation-free from stringent due diligence requirements. Critics argue that it could create loopholes, undermining the regulation’s intent to curb deforestation.

A trader source expressed skepticism, saying, “The ‘no risk’ category could lead to uneven enforcement, especially for markets already heavily reliant on compliant supply chains.” Meanwhile, environmental groups have voiced strong opposition, warning that it might weaken the overall effectiveness of the EUDR.

Looking ahead, the market is bracing for more volatility, with bearish sentiment prevailing amid uncertainties around demand, policy implementation, and currency fluctuations. The EUDR delay, combined with these challenges, underscores the fragility of the current market landscape.

Critics, including environmental groups and some businesses, argue this creates loopholes and undermines the law's integrity, while supporters claim it provides predictability. The proposal still requires negotiation with the European Commission and member states.

China-EU Negotiations on EV Tariffs Show Mixed Signals

China and the EU have reportedly made "technical progress" on a price commitment framework to regulate export prices and volumes of Chinese-made EVs, according to state-run CCTV. While CCTV emphasized mutual focus on negotiating core interests, the EU remains skeptical, with reports of limited progress and little hope for a swift resolution.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Rubber market goes numb to EUDR delay

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2005/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1890/mt FOB Belawan Surabaya, steady
• Helixtap assessed AFR10 US$1865/mt CFR Hamburg Rotterdam, steady 
• Helixtap implied AFR10 US$1825/mt FOB Abidjan, steady

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 28,500/kg ex-works, down IDR 500
• Helixtap assessed Thai raw material THB 58/kg ex-works, down THB 1
• Helixtap assessed Bulk latex US$1500/mt FOB Bangkok Laem Chabang, down US$150

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1930/mt FOB Ho chi minh, down US$70
• Helixtap assessed SMR20 US$2000/mt FOB Klang Penang, down US$50
• Helixtap assessed TSR 20 US$1945/mt CIF China, down US$130

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1935/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya

Market sentiment was “Bearish” - Helixtap sentiment tracker 

During the Asian trade day, the physical rubber market remained stable due to the limited reactions from market participants following the official EUDR delay announcement. The market had factored in the delay, which resulted in a muted response. Meanwhile, the buyers and sellers opted to stay away from the market for more clarity on the way forward. 

Producers anticipating bearish Q4 2024 and Q1 2025

The official delay of the EUDR by 12 months did not elicit a kneejerk reaction in the spot rubber market. Some market observers, contrary to the expected reaction, were relieved that the delay was just for 1 year instead of 2 years. 

A producer source noted that EUDR is officially back as a law and would be implemented, which is good news barring the delay. Meanwhile, it took a hit on the market activities during the day, as buyers and sellers opted to stay out of the market. 

This is going to impact the market pricing for the rubber, which was deemed EUDR-rubber. Some producers observed that this move would standardize the prices, thereby reducing the potential for further premiums. However, others noted that after the initial delay announcement by the European Commission, market expectations about premiums have decreased and are already priced in, which explains the lack of reaction in the market.

The market has experienced significant ambiguity due to various events over the past couple of weeks, including Trump's victory, the unsatisfactory Chinese stimulus, and the EUDR delay. According to a trader source, most people are waiting for new developments in the market.

The western market, especially European buyers, are already in holiday mode, said a Thai producer source. With the Lunar New Year holidays at the end of January in 2025, the market expects to see limited activities, especially in the spot market. 

Chinese buying has also slowed down significantly since the stimulus announcement. “This week they (Chinese buyers) went very quiet,” the producer source added. In addition, with Trump's victory the next few months following the inauguration are expected to be "very chaotic."

Meanwhile, the supply situation is on the way to ease resulting in a correction in the raw material prices. Despite the ongoing rains in Thailand's south, the supply from Thailand has also improved.

What’s new in EUDR

On November 14, members of the European Parliament (MEPs) voted in favor of a postponement of the EU Deforestation Regulation (EUDR). The EU Commission proposed the delay in response to concerns raised by various member states, non-EU countries, traders, and operators regarding the initial deadline of the end of 2024.

The new deadline would require the large operators and traders to fulfill the certification requirements set forth by the EUDR by December 30, 2025. The micro- and small enterprises have an extended deadline until June 30, 2026.

Additionally, the proposed amendments introduced a new classification for countries identified as posing "no risk" of deforestation, characterized by stable or increasing forest area development. These countries would encounter considerably less rigorous requirements.

However, this has placed some tire manufacturers and rubber producers/processors in jeopardy, as it heightens the uncertainty in the rubber value chain.

EUDR delayed, market cautious 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2015/mt FOB Bangkok Laem Chabang, down US$15
• Helixtap assessed SIR20 US$1890/mt FOB Belawan Surabaya, down US$25
• Helixtap assessed AFR10 US$1865/mt CFR Hamburg Rotterdam, down US$25
• Helixtap implied AFR10 US$1825/mt FOB Abidjan, down US$25

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1965/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2020/mt FOB Belawan Surabaya

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The European Parliament has approved the delay in implementation of the EUDR for a year. The rubber market was awaiting the final decision of the EUDR implementation. This led to a slowdown in the physical market activities, which in turn pushed down prices.

After the final vote the European parliament has pass the delay in the European Deforestation Regulation which would provide third countries, member states, operators, and merchants additional time to get ready. 

Eyes on EUDR

After the US election and disappointing Chinese stimulus, the market was awaiting the final decision on the EUDR due today. While the overall expectation is to see a year’s delay, market participants are unwilling to bet on anything until the final announcement. 

The proposal for a year delay in implementation brought in by the European Commission has derailed the rubber market, which was preparing for the implementation for the past two years. “I think there is still some uncertainty, and the European buyers would rather wait for an official statement,” said a producer source.

Global buying sentiment has significantly declined since mid-October, following the announcement by the European Commission. Due to the lack of exclusivity and the potential for improved weather to increase supply levels while demand is still low, the concerns about the risk of a surplus have heightened.

The ongoing market situation is in line with the expectation. The Singapore International Chamber of Commerce organized the 2024 Global Rubber Roundtable: Natural Rubber Ecosystem: 2025 and Beyond, where various market experts noted that this would have a significant impact on the entire rubber supply chain and market players who have been preparing for its implementation. Not only would it have a cost implication, but it would add more volume to a market that is already witnessing tepid demand conditions.

Meanwhile, just hours before the final voting in the European Parliament, the European People's Party withdrew six of the fifteen changes it had submitted to alter important aspects of the EU's anti-deforestation law, including the proposal for a 2-year delay.

Limited buying interest in the spot market 

Meanwhile, the market activities continued to remain muted during the Asian trade day. While there were ample offers in the market, the continued bearishness in the prices and various uncertainties kept the buyers away. 

There were offers for SIR 20 in the range of US$1900-US$1910/mt on a FOB basis, while the traded level was reported in the range of US$1885–US$1890/mt. The prices have seen over US$100/mt drop compared to November 7. 

A producer source pointed out that the disappointing stimulus from China dealt a significant blow to the sentiment that had initially surged following Trump's victory in the US presidential election. The market was expecting a relatively slower week, but a steep drop was unexpected. 

On the Chinese front, the market also moved slowly. Some market sources noted that even though prices have seen a significant correction, there has not been much revival in buying. The expectation is that the prices will need to soften further to bring some buyers back. The traded level for the STR 20 mixture hovered in the range of US$1930-US$1945/mt on a CIF basis. 

Meanwhile, with the goal of boosting demand and supporting the ailing property sector, China announced tax benefits on housing and land purchases. On the other hand, the increase in U.S. consumer price inflation last month solidified the belief that the Fed had good reason to loosen by an additional 25 basis points at its December meeting.

Bearish sentiment kept spot market illiquid

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2030/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1915/mt FOB Belawan Surabaya, down US$20
• Helixtap assessed AFR10 US$1890/mt CFR Hamburg Rotterdam, down US$20
• Helixtap implied AFR10 US$1850/mt FOB Abidjan, down US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1990/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2045/mt FOB Belawan Surabaya

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The physical rubber market continued with its slide during the Asian trade day, resulting in some sellers staying on the sidelines. The buying activity was largely muted in the southbound market, which raised concerns about panic selling in the upcoming weeks. Meanwhile, the African offers continued to flood the Chinese market, further adding on to the glut situation. 

Producers reluctant to offer 

During the day, there was a strong reluctance among the producers to offer at the existing levels. Various market sources have noted a decrease in the number of offers since Tuesday, as the producers find the current prices to be unsustainable.

There were trades for SIR 20 reported in the range of US$1910–US$1920/mt on a FOB basis, which is significantly lower than the previous day. Since the prices are already below cost, any additional correction without a corresponding decrease in raw material prices could further erode margins. “It is very hard to sell at these levels,” said a producer source.

The Thai prices have also experienced some correction, with offers ranging from US$2050-US$2060/mt on a FOB basis. The improvement in weather conditions is likely to ease supply and raw material prices, leading to further downward pressure on prices.

However, the recent strength in the US dollar has resulted in some buffer for the producers. 

Asian currencies have experienced significant volatility over the past three months. The recent strong rebound in the USD has contributed to the volatility, and the market participants are reassessing the anticipated extent of Fed rate cuts in the upcoming year. Asian currencies reached their highest levels against the US dollar at the end of September. Following the US election outcome, there has been a notable reversal in the value of Asian currencies.

The critical factor to consider is that volatility and policy uncertainties are expected to continue in the upcoming months. However, the Asian producers might accept depreciating currencies as a strategy to mitigate the effects of tariffs and bearish prices.

China remains muted, while African offers flood the market

The buying from China also remained muted during the day amid a widening bid and offer gap. Given the bearish outlook for demand and a likely delay in EUDR implementation, some sources predict panic selling in the coming days.

Offers for the STR 20 mixture ranged from US$1985–US$1990/mt on a CIF basis, but they failed to spark significant buying interest. The buyers find the prices too high, and their expectations for the same are around US$1965–US$1970/myt on a CIF basis.

Meanwhile, the Chinese market was inundated with numerous low-cost offers for AFR 10 cargoes, with the offer level typically ranging from US$1880-US$1890/mt on a CIF basis. A trader source stated that Chinese buyers are not showing interest, as the market has been inundated with African TSR offers since last month, following the announcement of the delay in the EUDR implementation.

According to customs data, the imports from Ivory Coast in August were the highest in 2024, and they were around 100% higher than the volume flow in July.

Source: Customs data & Helixtap

Muted prices; market expects some buying to return 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2040/mt FOB Bangkok Laem Chabang, down US$30
• Helixtap assessed SIR20 US$1935/mt FOB Belawan Surabaya, down US$30
• Helixtap assessed AFR10 US$1910/mt CFR Hamburg Rotterdam, down US$30
• Helixtap implied AFR10 US$1890/mt FOB Abidjan, down US$30

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2010/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2065/mt FOB Belawan Surabaya

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The disappointment over the Chinese stimulus during the Asian trade day led to a decline in the physical rubber prices. However, some market sources express optimism that this could potentially stimulate market buying. Meanwhile, EPP has put forth a proposal for a 2-year delay in the EUDR implementation.

Ample offers; buyers choose 

There were ample offers in the spot market amid the steep drop in the prices during the day. Some producer sources noted that the steep drop and relatively slower correction in the raw material prices are hurting the margins. 

Nevertheless, the producers were trying to push more volume in the market as the overall buying sentiment continued to remain bearish. There were trades for SIR 20 reported in the range of US$1925–US$1935/mt on a FOB basis, which is significantly lower than the previous day.

Dissatisfaction around the Chinese stimulus has been the key trigger for the onset of a steep intraday drop. In addition, the overall weakness in the auto sector and the uncertainty around the US-China tariff were pulling the market sentiment down. 

Some market participants are slightly optimistic that the correction in the prices might bring some buying back into the market. In the Chinese market, tire manufacturers chose to slow down, but there was an increase in arbitrage buying.

The prices saw corrections over the day, with the traded level for the STR 20 mixture being around US$1990-US$1995/mt on a CIF basis. A market source noted that all the prices for Q1 2025 are at a similar level, underscoring the bearishness and uncertainty in the market. 

Additionally, the strength of the US dollar is influencing the purchasing power of rubber traded in US dollars. The buying, especially from Europe and the US, is tepid amid ongoing political unrest and upcoming EUDR voting. 

EPP proposes a two-year delay in implementation 

While the voting for the final decision on the implementation of EUDR is due this week, the European People’s Party has proposed a two-year delay in the implementation of EUDR. This market participant is wary of the possibilities of the vote and final decision. 

After the German coalition collapsed, the market is unsure of the voting outcome. According to Helixtap's market intelligence, a vote of more than 50% would be the decisive factor. Currently, the market anticipates a one-year delay in the EUDR implementation, but a two-year delay could potentially disrupt the supply chain.

However, some NGOs are requesting the European Commission not to further delay the implementation date, as it would significantly impact the producers who have invested to meet the requirements.

Market lost steam on disappointing Chinese stimulus news 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2070/mt FOB Bangkok Laem Chabang, down US$20
• Helixtap assessed SIR20 US$1965/mt FOB Belawan Surabaya, down US$20
• Helixtap assessed AFR10 US$1940/mt CFR Hamburg Rotterdam, down US$20
• Helixtap implied AFR10 US$1900/mt FOB Abidjan, down US$20

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2040/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2095/mt FOB Belawan Surabaya

Market sentiment was “Bearish” - Helixtap sentiment tracker 

The physical rubber market was largely muted during the Asian trade day, as limited direct support policies in the Chinese stimulus dampened sentiments. Both Chinese and some international buyers opted to stay on the sidelines, anticipating more corrections in prices.

More correction in spot anticipated 

Throughout the day, the spot prices were affected by the overall bearish sentiment. Various market sources noted that there was hardly any interest in the market today. The key trigger was the lack of direct demand support in the Chinese stimulus, which the market was banking on. 

The Chinese market responded similarly, with muted buying activity. A trader source noted that the Chinese market was extremely quiet, with a significant drop in the STR 20 mixture trade prices during the day. A few trades for STR 20 mixture were reported in the range of US$2035-US$2040/mt on a CIF basis. 

On November 8, China announced a substantial 10-trillion-yuan debt package to alleviate local government financing pressures and support the stabilization of slowing economic growth.

However, the stimulus measures did not provide the anticipated direct infusion of capital into the economy, especially in light of the looming risk of substantial tariffs with the incoming Trump administration.

A producer source noted that there is hardly any support for the prices at the moment. With the exception of some regular purchases in the international market, tire manufacturers have chosen to remain out of the market. A few trades for SIR 20 were reported in the range of US$1960-US$1965/mt on a FOB basis, which was the level of the buyer's expectations.

The market is awaiting more clarity on the global economic situation, as Chinese retail sales and industrial output data are due late this week. Meanwhile, the Chinese tire makers are expecting more correction in the prices over the week.

Bearish cues from the auto and tire sectors are worrisome 

Meanwhile, bearish cues from the auto and tire sectors have also impacted the rubber market sentiment. Last week, several tire and auto majors reported production and job cuts.

By early 2026, French tire maker Micheline announced the closure of two plants, while German parts supplier Schaeffler has revealed plans to reduce its workforce. These developments underscore the ongoing challenges within the European automotive sector.

The decision to close operations was, as per the industry reports, a result of intensified competition from Asian tire manufacturers and deteriorating competitiveness due to rising inflationary pressures and escalating energy costs.

At the automotive front, Nissan, a Japanese automaker, decided to cut 9,000 jobs and a 20% decrease in manufacturing capacity amid weak sales performance within the Chinese and U.S. markets.

The global automakers are facing challenges in the Chinese market, where domestic competitors such as BYD are gaining market share through cost-effective electric vehicles and petrol-electric hybrids. Even Audi, the German automotive manufacturer, is planning to reduce its workforce in the medium term.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Market sentiment was “Bullish” - Helixtap sentiment tracker 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2,200/mt FOB Bangkok Laem Chabang
• Helixtap assessed SIR20 US$2,080/mt FOB Belawan Surabaya
• Helixtap assessed AFR10 US$2,030/mt CFR Hamburg Rotterdam
• Helixtap implied AFR10 US$1,990/mt FOB Abidjan

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material 28,000IDR/kg ex-works
• Helixtap assessed Thai raw material 62.5THB/kg ex-works
• Helixtap assessed Bulk latex US$1,565/mt FOB Bangkok Laem Chabang

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1,990/mt FOB Ho chi minh
• Helixtap assessed SMR20 US$2,080/mt FOB Klang Penang
• Helixtap assessed TSR 20 US$2,080/mt CIF China

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2,090/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2,200/mt FOB Belawan Surabaya

Daily Commentary: Rubber Market Tightens as Speculative Optimism Outpaces Demand

The rubber market continues its upward trajectory, fueled by speculative sentiment and persistent supply constraints. November 2024 set the stage for this rally, with TSR20 futures climbing steadily on the SGX. Prices hovered around 2,100 USD/MT for P2 (Feb 2024) contracts as of December 3, reflecting a sharp increase from earlier in November. While bullish sentiment persists, demand fundamentals remain weak, prompting questions about the sustainability of the rally.

Source: Price Signal, Differentials Tab

Source: Price Signal, Differentials Tab

The rubber market has exhibited notable price movements over the past month, with STR20 and SIR20 prices reflecting strong upward momentum despite subdued demand. STR20 saw sharp price increases, peaking mid-November before stabilizing, driven by tight supply due to heavy rains in Thailand. SIR20 exhibited a more volatile trajectory over the past month, with prices fluctuating as demand remained weaker compared to Thai STR20. 

The rising 20-day, 50-day, and 200-day moving averages underscore persistent bullish sentiment, though market fundamentals remain fragile. Buyers are cautious, with limited forward commitments, reflecting ongoing uncertainty despite speculative optimism surrounding Chinese stimulus measures and improved global economic indicators.

Weather Disruptions Amplify Supply Constraints

The supply-side pressures driving this rally stem largely from adverse weather in Thailand, the world’s leading rubber producer. Heavy rains throughout November disrupted tapping activities, leading to reduced availability and higher raw material costs. Thai cup lump prices reached THB62–63/kg, while field latex prices hovered at THB 69–71/kg. 

Demand Remains Subdued Despite Price Increases

Despite the upward momentum in prices, demand fundamentals remain muted. Buyers, including tire manufacturers, are largely sidelined, deterred by elevated costs and market volatility. Forward bookings are sparse, with traders focusing on prompt shipments to mitigate risks. In China, optimism about upcoming stimulus measures has not yet translated into significant buying activity. STR20 mixture cargoes traded at US$2085–2090/mt CIF, but forward interest remains minimal as participants await clarity on the stimulus package.

Chinese buying continues, but for cargoes further out. This could indicate they are well stocked in the near term. Indonesian shipments to China fared well, probably as they were priced competitively. 

EUDR delay, impact on NR market

The recent EUDR developments provide traders and suppliers with additional lead time to ensure compliance, offering some relief to those still adapting their processes. However, for operators already prepared to meet the December 30, 2024, deadline, expectations of securing higher premiums for early compliance may need to be tempered as the playing field becomes more even.

Regionally, the regulatory shift could rebalance the market. Countries like Indonesia, Malaysia, and Vietnam, which have lagged behind leaders like Ivory Coast and Thailand in terms of compliance readiness, now have an opportunity to catch up. This leveling effect could reduce disparities in trade competitiveness and bring more stability to the market, especially in light of anticipated tariffs in 2025. For traders, this dynamic creates both challenges and opportunities to optimize supply chains and pricing strategies in the evolving regulatory environment. More details here. 

Source: Customs Data, Helixtap Analytics

China's demand for Indonesian rubber remains closely tied to its price sensitivity, as Indonesia typically offers lower-cost grades like SIR20 compared to Thai STR20. The chart reflects cyclical purchasing patterns, with demand surging during periods when Indonesian rubber provides a cost advantage. 

Recent months show a rebound in export volumes, likely driven by Chinese buyers capitalizing on Indonesia's competitive pricing amidst rising global rubber costs. This trend underscores China's preference for Indonesian rubber as a value-driven alternative, particularly when high prices from Thailand and Africa reduce their appeal.

Outlook: Sentiment-Driven Rally Faces Fragile Fundamentals

While the current rally is underpinned by supply constraints and speculative optimism, the lack of strong demand fundamentals introduces significant risks. Forward market activity remains subdued, and key buyers are reluctant to commit amid ongoing volatility, with many being on the sidelines in the physical market when there were big sudden movements.

Traders should monitor developments in Thailand’s weather, the impact of China’s stimulus measures, and shifting automotive trends to navigate this uncertain landscape effectively. The potential for a correction looms large if demand fails to align with current price levels. For now, the market appears to be walking a fine line, with sentiment driving short-term gains but fragile fundamentals threatening to undermine long-term sustainability.

Notifications: 

• Please note that Helixtap will publish the assessments on December 24 at 12 pm SGT.

• Helixtap will not publish any assessments from December 26 – December 31, 2024. We will resume the publication of the assessments on January 2, 2025.

Better China tender price supports spot 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2080/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1950/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1915/mt CFR Hamburg Rotterdam, up US$15
• Helixtap implied AFR10 US$1875/mt FOB Abidjan, up US$15

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,750/kg ex-works, down IDR 1500
• Helixtap assessed Thai raw material THB 59/kg ex-works, up THB 2
• Helixtap assessed Bulk latex US$1550/mt FOB Bangkok Laem Chabang, up US$50

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1950/mt FOB Ho chi minh, up US$80
• Helixtap assessed SMR20 US$2060/mt FOB Klang Penang, up US$90
• Helixtap assessed TSR 20 US$2035/mt CIF China, up US$65

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1985/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2050/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Better than expected China's tender prices bolstered the sentiment of the spot market during the Asian trade day, further supported by the deteriorating weather conditions in Thailand.

Meanwhile, Indonesian raw material prices witness a steep drop amid tepid demand. 

Chinese tender prices prop the market up

Better-than-expected Chinese tender prices kept the sentiment buoyant, muting the physical market activities amid a surge in spot prices. According to some market sources, the tender results are excellent, which is why the market is going up. 

According to Helixtap market intelligence, a total of 40,000 mt was sold out of the 120,000 mt tendered. Out of 100,000 mt of RSS3, only 30,000–32,000 mt were sold.  Despite the limited volume sold, the sentiment remained unaffected due to the higher transacted levels. The transacted level for SCRWF was in the range of Yuan 13300–Yuan 13500/mt (US$1836–US$1864/mt), and for RSS 3, the transacted level was around Yuan 18900–Yuan 19100/mt (US$2610–US$2637/mt).

The market participants were anticipating a response following the price announcement. Given the ongoing bearishness in the demand outlook, this reaction is crucial at the moment. The initial tender announcement had a limited impact on the market.

China is expected to replenish its reserve stock following the liquidation of the remaining inventory. This is anticipated to offer a stabilizing influence on the market during that period. The market is projecting an early restocking from China, influenced by the upcoming Lunar New Year holidays in January of the following year. The traded level for the STR 20 mixture inched up considerably, ranging between US$2030 and US$2035/mt on a CIF basis. 

Thai weather conditions worsen 

The deteriorating weather conditions in Thailand have raised concerns among market observers, as some anticipate further deterioration. A Thai producer source stated that the situation is currently deteriorating and could worsen if the rain continues.

However, he noted that despite the rains only affecting the south of Thailand, they would have a significant impact, given that the south accounts for around 80% of Thailand's rubber production. Market sources have indicated that the flood situation in Thailand is becoming increasingly severe, leading some local producers to suspend factory operations for the remainder of the week.

Indonesian raw materials witness a steep correction. 

Unlike the situation in Thailand, the collapse of Indonesian cup lump prices was caused by a lack of demand. According to Helixtap market sources, the gap between factory and farmgate prices has narrowed considerably. 

Even though there are reports of heavy rains in Sumatra, the weakness in demand has massively impacted the raw material prices. Some producer sources noted that the supply would resume as the rain eases, as rains are always beneficial for rubber. 

More correction spot anticipated next week

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$1990/mt FOB Bangkok Laem Chabang, down US$30
• Helixtap assessed SIR20 US$1890/mt FOB Belawan Surabaya, down US$30
• Helixtap assessed AFR10 US$1860/mt CFR Hamburg Rotterdam, down US$30
• Helixtap implied AFR10 US$1820/mt FOB Abidjan, down US$30

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 27,250/kg ex-works, down IDR 750
• Helixtap assessed Thai raw material THB 57/kg ex-works, down THB 1
• Helixtap assessed Bulk latex US$1500/mt FOB Bangkok Laem Chabang, steady

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1870/mt FOB Ho chi minh, down US$60
• Helixtap assessed SMR20 US$1970/mt FOB Klang Penang, down US$30
• Helixtap assessed TSR 20 US$1970/mt CIF China, up US$25

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1930/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya

Market sentiment was “Slightly bearish” - Helixtap sentiment tracker 

The bearish note in the physical rubber market during the Asian trade day continued to keep the prices volatile. As the news of the Chinese stock rotation spreads, market participants anticipate further corrections in the upcoming week. Meanwhile, rains in Thailand tightened the supply. On the other hand, amid limited demand, Thailand opted to halt offers for EUDR cargo. 

Spot trend bearish

The day's market activities remained largely muted due to the ongoing volatility. While the market attributed this to the news of China's stock rotation due next week, others believe the key bottleneck has been the bearish demand.

The buying activity in all markets has slowed down due to market caution. Both sellers and buyers were uncertain about where to set the market price. The news of the Chinese stock rotation heightened the bearish mood in the market following the EUDR delay.

It is evident that the market sentiment is likely to be affected; some market sources have noted a significant slowdown in Chinese buying, and they anticipate further downward pressure on prices next week. On a CIF basis, the reported traded level for the STR 20 mixture was in the range of US$1960-US$1970/mt. “The market is probably reacting to the China stockpile release,” said a Singapore-based source.

The trend was also observed in international buying. Apart from some regular buyers, there was minimal interest in the spot market. As a result, the SIR 20 traded level saw a significant intra-day drop, with trades reported at around US$1890/mt on a FOB basis. 

Thai raw material supplies tighten again 

Meanwhile, weather conditions worsened in South Thailand, impacting tapping activities there.  According to Helixtap market intelligence, there was a flash flood today in Patthalung and Nakorn Sri Thammarat. 

A Thai producer source noted that there is heavy rainfall in southern Thailand, so the supply is rather tight. Thai cup lump prices were in the range of THB 56-THB 57/kg. There was more support for field latex, which hovered in the range of THB 67-THB 68/kg owing to tight supply. 

The Thai Meteorological Department has released an advisory regarding severe thunderstorms projected to impact the southern region. The forecast indicates the likelihood of heavy rainfall, strong winds, and turbulent sea conditions from Thursday through Saturday.

Meanwhile, the prices of Indonesian cup lumps stabilized during the week. Amid tepid demand and weak market cues, Indonesian farmgate prices saw a week-on-week correction of around 4%. 

Halt in Thai EUDR cargoes surprises buyers 

While spot demand remained, some buyers still interested in the EUDR cargoes are struggling to find shipments, as some sources noted that Thailand has stopped offering them. While some Thai producer sources noted that the move was logical given the delay, they also noted that there would not be much demand in the coming months. Therefore, there is no purpose in introducing it to the market.

However, some market sources noted that some of the European and US tire makers continue to inquire for EUDR rubber. This is an attempt by the tire makers to support the producers/suppliers who have invested in preparing for the implementation by the end of the year. However, the premium levels are significantly lower than the levels seen earlier this year. 

The market is likely to see a lull in the EUDR space in the first quarter of the year. However, given the new implementation date this year, it is likely that activities for EUDR rubber will pick up by mid-2025. Despite this, the premiums would continue to decline.

The market anticipated the delay after the European Commission’s initial proposal in mid-October. As a result, the delay had a limited impact on prices, as the market adjusted the premium levels accordingly. As per Helixtap analytics, the premium level has seen more than 50% drop since May.

Rubber market goes numb to EUDR delay

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2005/mt FOB Bangkok Laem Chabang, down US$10
• Helixtap assessed SIR20 US$1890/mt FOB Belawan Surabaya, steady
• Helixtap assessed AFR10 US$1865/mt CFR Hamburg Rotterdam, steady 
• Helixtap implied AFR10 US$1825/mt FOB Abidjan, steady

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 28,500/kg ex-works, down IDR 500
• Helixtap assessed Thai raw material THB 58/kg ex-works, down THB 1
• Helixtap assessed Bulk latex US$1500/mt FOB Bangkok Laem Chabang, down US$150

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1930/mt FOB Ho chi minh, down US$70
• Helixtap assessed SMR20 US$2000/mt FOB Klang Penang, down US$50
• Helixtap assessed TSR 20 US$1945/mt CIF China, down US$130

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1935/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$1990/mt FOB Belawan Surabaya

Market sentiment was “Bearish” - Helixtap sentiment tracker 

During the Asian trade day, the physical rubber market remained stable due to the limited reactions from market participants following the official EUDR delay announcement. The market had factored in the delay, which resulted in a muted response. Meanwhile, the buyers and sellers opted to stay away from the market for more clarity on the way forward. 

Producers anticipating bearish Q4 2024 and Q1 2025

The official delay of the EUDR by 12 months did not elicit a kneejerk reaction in the spot rubber market. Some market observers, contrary to the expected reaction, were relieved that the delay was just for 1 year instead of 2 years. 

A producer source noted that EUDR is officially back as a law and would be implemented, which is good news barring the delay. Meanwhile, it took a hit on the market activities during the day, as buyers and sellers opted to stay out of the market. 

This is going to impact the market pricing for the rubber, which was deemed EUDR-rubber. Some producers observed that this move would standardize the prices, thereby reducing the potential for further premiums. However, others noted that after the initial delay announcement by the European Commission, market expectations about premiums have decreased and are already priced in, which explains the lack of reaction in the market.

The market has experienced significant ambiguity due to various events over the past couple of weeks, including Trump's victory, the unsatisfactory Chinese stimulus, and the EUDR delay. According to a trader source, most people are waiting for new developments in the market.

The western market, especially European buyers, are already in holiday mode, said a Thai producer source. With the Lunar New Year holidays at the end of January in 2025, the market expects to see limited activities, especially in the spot market. 

Chinese buying has also slowed down significantly since the stimulus announcement. “This week they (Chinese buyers) went very quiet,” the producer source added. In addition, with Trump's victory the next few months following the inauguration are expected to be "very chaotic."

Meanwhile, the supply situation is on the way to ease resulting in a correction in the raw material prices. Despite the ongoing rains in Thailand's south, the supply from Thailand has also improved.

What’s new in EUDR

On November 14, members of the European Parliament (MEPs) voted in favor of a postponement of the EU Deforestation Regulation (EUDR). The EU Commission proposed the delay in response to concerns raised by various member states, non-EU countries, traders, and operators regarding the initial deadline of the end of 2024.

The new deadline would require the large operators and traders to fulfill the certification requirements set forth by the EUDR by December 30, 2025. The micro- and small enterprises have an extended deadline until June 30, 2026.

Additionally, the proposed amendments introduced a new classification for countries identified as posing "no risk" of deforestation, characterized by stable or increasing forest area development. These countries would encounter considerably less rigorous requirements.

However, this has placed some tire manufacturers and rubber producers/processors in jeopardy, as it heightens the uncertainty in the rubber value chain.

Market sentiment was “Bullish” - Helixtap sentiment tracker 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2,200/mt FOB Bangkok Laem Chabang
• Helixtap assessed SIR20 US$2,080/mt FOB Belawan Surabaya
• Helixtap assessed AFR10 US$2,030/mt CFR Hamburg Rotterdam
• Helixtap implied AFR10 US$1,990/mt FOB Abidjan

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material 28,000IDR/kg ex-works
• Helixtap assessed Thai raw material 62.5THB/kg ex-works
• Helixtap assessed Bulk latex US$1,565/mt FOB Bangkok Laem Chabang

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1,990/mt FOB Ho chi minh
• Helixtap assessed SMR20 US$2,080/mt FOB Klang Penang
• Helixtap assessed TSR 20 US$2,080/mt CIF China

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2,090/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2,200/mt FOB Belawan Surabaya

Daily Commentary: Rubber Market Tightens as Speculative Optimism Outpaces Demand

The rubber market continues its upward trajectory, fueled by speculative sentiment and persistent supply constraints. November 2024 set the stage for this rally, with TSR20 futures climbing steadily on the SGX. Prices hovered around 2,100 USD/MT for P2 (Feb 2024) contracts as of December 3, reflecting a sharp increase from earlier in November. While bullish sentiment persists, demand fundamentals remain weak, prompting questions about the sustainability of the rally.

Source: Price Signal, Differentials Tab

Source: Price Signal, Differentials Tab

The rubber market has exhibited notable price movements over the past month, with STR20 and SIR20 prices reflecting strong upward momentum despite subdued demand. STR20 saw sharp price increases, peaking mid-November before stabilizing, driven by tight supply due to heavy rains in Thailand. SIR20 exhibited a more volatile trajectory over the past month, with prices fluctuating as demand remained weaker compared to Thai STR20. 

The rising 20-day, 50-day, and 200-day moving averages underscore persistent bullish sentiment, though market fundamentals remain fragile. Buyers are cautious, with limited forward commitments, reflecting ongoing uncertainty despite speculative optimism surrounding Chinese stimulus measures and improved global economic indicators.

Weather Disruptions Amplify Supply Constraints

The supply-side pressures driving this rally stem largely from adverse weather in Thailand, the world’s leading rubber producer. Heavy rains throughout November disrupted tapping activities, leading to reduced availability and higher raw material costs. Thai cup lump prices reached THB62–63/kg, while field latex prices hovered at THB 69–71/kg. 

Demand Remains Subdued Despite Price Increases

Despite the upward momentum in prices, demand fundamentals remain muted. Buyers, including tire manufacturers, are largely sidelined, deterred by elevated costs and market volatility. Forward bookings are sparse, with traders focusing on prompt shipments to mitigate risks. In China, optimism about upcoming stimulus measures has not yet translated into significant buying activity. STR20 mixture cargoes traded at US$2085–2090/mt CIF, but forward interest remains minimal as participants await clarity on the stimulus package.

Chinese buying continues, but for cargoes further out. This could indicate they are well stocked in the near term. Indonesian shipments to China fared well, probably as they were priced competitively. 

EUDR delay, impact on NR market

The recent EUDR developments provide traders and suppliers with additional lead time to ensure compliance, offering some relief to those still adapting their processes. However, for operators already prepared to meet the December 30, 2024, deadline, expectations of securing higher premiums for early compliance may need to be tempered as the playing field becomes more even.

Regionally, the regulatory shift could rebalance the market. Countries like Indonesia, Malaysia, and Vietnam, which have lagged behind leaders like Ivory Coast and Thailand in terms of compliance readiness, now have an opportunity to catch up. This leveling effect could reduce disparities in trade competitiveness and bring more stability to the market, especially in light of anticipated tariffs in 2025. For traders, this dynamic creates both challenges and opportunities to optimize supply chains and pricing strategies in the evolving regulatory environment. More details here. 

Source: Customs Data, Helixtap Analytics

China's demand for Indonesian rubber remains closely tied to its price sensitivity, as Indonesia typically offers lower-cost grades like SIR20 compared to Thai STR20. The chart reflects cyclical purchasing patterns, with demand surging during periods when Indonesian rubber provides a cost advantage. 

Recent months show a rebound in export volumes, likely driven by Chinese buyers capitalizing on Indonesia's competitive pricing amidst rising global rubber costs. This trend underscores China's preference for Indonesian rubber as a value-driven alternative, particularly when high prices from Thailand and Africa reduce their appeal.

Outlook: Sentiment-Driven Rally Faces Fragile Fundamentals

While the current rally is underpinned by supply constraints and speculative optimism, the lack of strong demand fundamentals introduces significant risks. Forward market activity remains subdued, and key buyers are reluctant to commit amid ongoing volatility, with many being on the sidelines in the physical market when there were big sudden movements.

Traders should monitor developments in Thailand’s weather, the impact of China’s stimulus measures, and shifting automotive trends to navigate this uncertain landscape effectively. The potential for a correction looms large if demand fails to align with current price levels. For now, the market appears to be walking a fine line, with sentiment driving short-term gains but fragile fundamentals threatening to undermine long-term sustainability.

Notifications: 

• Please note that Helixtap will publish the assessments on December 24 at 12 pm SGT.

• Helixtap will not publish any assessments from December 26 – December 31, 2024. We will resume the publication of the assessments on January 2, 2025.

 Stalemate continues in market, spot northbound  

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2170/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$2030/mt FOB Belawan Surabaya, up US$5
• Helixtap assessed AFR10 US$2000/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1960/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2070/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2130/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The upward bias continued in the spot market, but the pace of the rally slowed down during the day. The anticipation around the prices kept the buyers sidelined, with more clarity expected next week. 

Buyers mostly sidelined this week

The surge in the prices this week kept the tiremakers away for most of the trading days in the international market. Some buyers have noted that the unprecedented spike in the market has prevented them from booking shipments.

While the uptick in the market is largely sentiment-driven owing to the upcoming Chinese stimulus announcement and rains in Thailand, the demand has not seen any revival yet. 

While some offers were present in the market, they primarily served as price indications rather than firm offers. Thai raw material prices continued to rise amid restricted tapping activities. The Thai cup lump prices moved up to around THB61-THB61.5/kg, while field latex prices hovered in the range of THB70-THB71/kg.

However, a public holiday in Thailand limited the TSR offers, further dampening market activities.

The market conditions in Indonesia, however, were slightly different, as the tepid buying impacted the SIR prices more than the other grades. Over the year, demand for Indonesian rubber has been slowing down, and with the recent surge, producer sources have noted a further decline in market interest.

According to a producer source, the market is oversupplied, which is why the prices of rubber in Indonesia are not as high as those in other regions.

Forward market bearish; Chinese arb buying restricted to nearby month

With the improvement in the weather conditions, the supply is likely to ease. In addition, given the disappointing recent Chinese stimulus announcement, the buyers in China are restricting the bookings largely for the prompt shipments. 

There were trades for prompt shipments of the STR 20 mixture in the range of US$2085–US$2090/mt on a CIF basis, while there was some interest from the SMR 20 mixture as well, which traded in the range of US$2065–US$2070/mt on a CIF basis. 

A trader source noted that the bearish take for the forward months has limited the traded volume in the market. There was some interest from the end users, but that  was limited from prompt shipments. A Singapore-based source added that the market participants are unwilling to take risks given the volatility this year.

Recalibration in the Chinese EV sector 

Meanwhile, Chinese automakers intend to increase their exports of hybrid vehicles to Europe in an attempt to evade the constraints of the European Union's electric vehicle tariff framework. The implementation of EU tariffs, reaching as high as 45.3% on imports of Chinese electric vehicles, commenced in late October.

The recent tariffs imposed to protect the automotive sector do not apply to hybrid vehicles. Some of the major Chinese brands are thus expected to continue their expansion in the region via hybrid vehicles.

On the other hand, sales of China-made electric vehicles by Tesla experienced an annual decline of 4.3% in November, underscoring the rising competition in the EV segment.

Notifications: 

• Please note that Helixtap will publish the assessments on December 24 at 12 pm SGT.

• Helixtap will not publish any assessments from December 26 – December 31, 2024. We will resume the publication of the assessments on January 2, 2025.

Market upbeat for more strength in spot; demand tepid 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2160/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$2025/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1990/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1950/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2060/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2125/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Upbeat market sentiments kept the spot prices northbound during the Asian trade day driven by the weather conditions in Thailand. Even though the pace of the surge slowed down compared to the previous day, the sentiment continued to remain upbeat, albeit nudging the buyers away from the market. 

Sentimental support for spot is not fundamental

The spot market continued to rally despite limited demand. The ongoing rains in Thailand have kept the prices buoyant. While some Thai producers noted that the supply is likely to tighten further as weather conditions have not improved yet. "We anticipate more rain in the upcoming days," a producer source stated.

The surge in Thai cup lump and field latex prices continues to impact the TSR pricing level. Even though the rain in the last quarter is seasonal, the cumulative impact of unexpected heavy rains over the past year has amplified the impact on the market sentiment. 

As a result, the prices have moved up across the board. According to Helixtap market sources, the market observers are expecting the prices to move up by another US$200–US$300/mt next year. However, given the ongoing demand situation, the prediction may be considered "too optimistic".

Given the upward trend in prices, several major tire manufacturers have chosen to remain out of the market. A trader source observed that despite some inquiries, the market remains extremely quiet, primarily due to the need to monitor price levels.

Producers also displayed a similar attitude, with some feeling hesitant to make an offer given the current market conditions. There were some indicative offers for SIR 20 in the range of US$2040-US$2050/mt on a FOB basis, but no firm offers emerged.

According to the Rubber Authority of Thailand's estimates, ongoing weather conditions can disrupt tapping activities for over a month. However, no producers have declared an official force majeure, suggesting that the situation has not deteriorated yet.

China slightly slower during the day 

Following an initial surge in trading activity the previous day due to reports of the Chinese stimulus announcement next week, the pace of Chinese buying slowed down slightly during the day. Arbitrage buyers continued to dominate the buying, but the traded level was slightly lower than the previous day.

On a CIF basis, STR 20 mixture cargoes reportedly traded in the range of US$2080-US$2085/mt. Expectation for more stimulus support next week has been keeping the market sentiment upbeat. 

Some Indian buying interest 

Meanwhile, some movements of African rubber were observed into the Indian market. There were trades for AFR 10 to India in the range of US$1980-US$1990/mt on a CIF basis, which is better than the levels seen in the Chinese market. 

The increase in raw material costs significantly impacted the profit margins of Indian tire manufacturers during the second quarter of FY 2024-2025 (July 2024 to September 2024). In response, these companies turned to substantial imports of compound rubber from Southeast Asia to mitigate the effects of rising domestic natural rubber prices.

There is no longer a "no risk" category in EUDR

Meanwhile, the trialogue between the European Council, Commission, and Parliament has dropped the no-risk category on the EUDR front. The provisional agreement confirms the one-year delay in EUDR implementation. The market now awaits the final decision later this month.

Spot rally on China’s stimulus anticipation & Thailand weather condition

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2150/mt FOB Bangkok Laem Chabang, up US$45
• Helixtap assessed SIR20 US$2015/mt FOB Belawan Surabaya, up US$40
• Helixtap assessed AFR10 US$1980/mt CFR Hamburg Rotterdam, up US$40
• Helixtap implied AFR10 US$1940/mt FOB Abidjan, up US$40

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2050/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2115/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The news of China's stimulus announcement next week, coupled with the ongoing rains in Thailand, triggered a northbound trend in the spot market during the Asian trade day. In the meantime, market participants chose to remain out of the market as they attempted to assess the future course of events.

Spot market activities muted 

There were hardly any offers or bids in the physical rubber market during the day, as the prices continued to drive north. Amid a lack of support from demand, the nudge to the market was largely sentiment-driven, which heightened the volatility in the market. 

A producer source noted that the market's uptick could be triggered by China's stimulus meeting next week. He added that they were not keen on offering in these market conditions, as it is difficult to judge the way forward. 

There were some inquiries for cargoes, but no serious bids in the market, as buyers were trying to judge the availability rather than the price level. 

Industry reports indicate that China will convene a meeting next week to establish economic objectives and stimulus strategies for 2025. Falling producer prices and declining orders preceded the strong PMI data for October and November, indicating that the stimulus announcements are boosting market confidence.

Furthermore, the stronger-than-expected October trade data highlights a tendency to prioritize exports ahead of any future tariff announcements from China. Consequently, the year-over-year increase in tire exports was approximately 11.2%.

Source: Helixtap analytics & Customs data

The central bank has pledged to provide monetary policy assistance to promote economic growth, anticipating potential obstacles on the tariff front. Meanwhile, market observers are concerned about the subdued economic growth and the potential impact of US tariffs, which could heighten market volatility.

Thailand rains and it’s impact 

The heavy rains in Thailand are a significant factor influencing market prices. Although opinions on the severity of the situation vary, some predict a significant impact due to the cessation of tapping activities in certain regions.

With the overall bearishness in demand, there have not been any reports of defaults or delays, but the authorities in Thailand are on high alert for more intense rainfall after days of monsoon rains triggered devastating floods. There is a possibility of more heavy rains through the week, putting certain areas further at risk of flash floods.

A trader source noted that the weather situation is adding to the upward trend in the market.  Since it's the monsoon season in Southeast Asia, Thailand, Indonesia, and Vietnam are currently experiencing rain. However, the magnitude of the rains in Thailand is higher than anticipated. 

However, this could potentially benefit the yield next year, leading to timely wintering, in contrast to this year's early wintering caused by dry weather conditions.

 Strong Chinese data perks up spot 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2105/mt FOB Bangkok Laem Chabang, up US$25
• Helixtap assessed SIR20 US$1975/mt FOB Belawan Surabaya, up US$25
• Helixtap assessed AFR10 US$1940/mt CFR Hamburg Rotterdam, up US$25
• Helixtap implied AFR10 US$1900/mt FOB Abidjan, up US$25

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$2010/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2075/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Expansion in the Chinese factory activities coupled with the recent disruption in production in Thailand lent support to the physical rubber market during the day. Meanwhile, the buyers were still cautious and opted to stay on the sidelines.

Caution prevails among buyers and sellers

The apprehension among the buyers amid northbound physical prices kept the buying largely limited. Various sources noted that December lull has hit the market because there is hardly any buying interest. 

Meanwhile, the surge in raw material prices following the recent rains in Thailand has prevented producers from lowering their offers. While Thai cup lump prices continue to surge, there has been an uptick in Indonesian prices as well. 

Some market sources noted that the Indonesian cost averages at around US$1950-US$1960/mt, so the producers are not too keen to offer below US$2000/mt on an FOB basis. However, the uncertainty surrounding the demand outlook is weighing on trading activities. 

Even in China, there was limited buying interest. There were some trades for the STr 20 mixture reported in the range of US$2025-US$2030/mt on a CIF basis against the offers of US$2060-US$2070/mt on a COF basis. A trader source noted that the buying interest was primarily for the nearby months, and added that the producers were unwilling to offer at similar levels for the forward months.

Meanwhile, there were some higher offers for SVR 10 as well, which hovered between US$2080 and US$2100/mt on an FOB basis. These higher offers are unlikely to attract any interest in the international market, particularly given the increased competition from SIR 20 in the market. However, another trader source pointed out that domestic end-users primarily purchase Vietnamese rubber amid a "dead" status of the international market. Market participants attributed the “unrealistic SVR offers” to higher raw material costs. 

Macro factors impacting the sentiment 

Amid a lack of buying, the market was largely driven by the macro factors at play, and expansion in Chinese factory activities in November was the key trigger. In November, China's factory activity expanded, driven by a series of stimulus measures coupled with escalating trade threats from the US.

The sentiment within China's manufacturing sector has remained subdued for several months, attributed to declining producer prices and a reduction in orders. However, the recent two months of positive PMI indicate that the stimulus measures are percolating in the market.

However, other Asian countries, like Japan, India, Malaysia, Thailand, and Indonesia, witnessed a slowdown.  In addition, increased US tariffs may pose risks to China's industrial sector in the coming months. This is contributing to the increased caution among market observers.

While US dollar policies and tariffs can influence supply and demand dynamics, a producer source added that no direct causation is evident at this time because it's still too early to say.

The summary from our predictive forecasting this week:

To see more and compare the physical and futures spread, click here. Email any of our team members to understand our forecasting solution.

Better China tender price supports spot 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2080/mt FOB Bangkok Laem Chabang, up US$20
• Helixtap assessed SIR20 US$1950/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1915/mt CFR Hamburg Rotterdam, up US$15
• Helixtap implied AFR10 US$1875/mt FOB Abidjan, up US$15

Helixtap weekly Raw Material Prices Assessment

• Helixtap assessed Indonesian raw material IDR 25,750/kg ex-works, down IDR 1500
• Helixtap assessed Thai raw material THB 59/kg ex-works, up THB 2
• Helixtap assessed Bulk latex US$1550/mt FOB Bangkok Laem Chabang, up US$50

Helixtap weekly Physical Prices Assessment

• Helixtap assessed SVR10 US$1950/mt FOB Ho chi minh, up US$80
• Helixtap assessed SMR20 US$2060/mt FOB Klang Penang, up US$90
• Helixtap assessed TSR 20 US$2035/mt CIF China, up US$65

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1985/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2050/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Better than expected China's tender prices bolstered the sentiment of the spot market during the Asian trade day, further supported by the deteriorating weather conditions in Thailand.

Meanwhile, Indonesian raw material prices witness a steep drop amid tepid demand. 

Chinese tender prices prop the market up

Better-than-expected Chinese tender prices kept the sentiment buoyant, muting the physical market activities amid a surge in spot prices. According to some market sources, the tender results are excellent, which is why the market is going up. 

According to Helixtap market intelligence, a total of 40,000 mt was sold out of the 120,000 mt tendered. Out of 100,000 mt of RSS3, only 30,000–32,000 mt were sold.  Despite the limited volume sold, the sentiment remained unaffected due to the higher transacted levels. The transacted level for SCRWF was in the range of Yuan 13300–Yuan 13500/mt (US$1836–US$1864/mt), and for RSS 3, the transacted level was around Yuan 18900–Yuan 19100/mt (US$2610–US$2637/mt).

The market participants were anticipating a response following the price announcement. Given the ongoing bearishness in the demand outlook, this reaction is crucial at the moment. The initial tender announcement had a limited impact on the market.

China is expected to replenish its reserve stock following the liquidation of the remaining inventory. This is anticipated to offer a stabilizing influence on the market during that period. The market is projecting an early restocking from China, influenced by the upcoming Lunar New Year holidays in January of the following year. The traded level for the STR 20 mixture inched up considerably, ranging between US$2030 and US$2035/mt on a CIF basis. 

Thai weather conditions worsen 

The deteriorating weather conditions in Thailand have raised concerns among market observers, as some anticipate further deterioration. A Thai producer source stated that the situation is currently deteriorating and could worsen if the rain continues.

However, he noted that despite the rains only affecting the south of Thailand, they would have a significant impact, given that the south accounts for around 80% of Thailand's rubber production. Market sources have indicated that the flood situation in Thailand is becoming increasingly severe, leading some local producers to suspend factory operations for the remainder of the week.

Indonesian raw materials witness a steep correction. 

Unlike the situation in Thailand, the collapse of Indonesian cup lump prices was caused by a lack of demand. According to Helixtap market sources, the gap between factory and farmgate prices has narrowed considerably. 

Even though there are reports of heavy rains in Sumatra, the weakness in demand has massively impacted the raw material prices. Some producer sources noted that the supply would resume as the rain eases, as rains are always beneficial for rubber. 

Rains in Thailand nudged spot up, production impacted in south

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2060/mt FOB Bangkok Laem Chabang, up US$30
• Helixtap assessed SIR20 US$1935/mt FOB Belawan Surabaya, up US$15
• Helixtap assessed AFR10 US$1900/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1860/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1970/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2035/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

Heavy rains in the south of Thailand impacted production, driving up raw material prices during the Asian trade day and keeping the spot market northbound. However, some market sources believe that tepid demand and the impact of rains restricted to a part of Thailand would prevent any further escalation. 

Raw material short again 

Bad weather conditions hit the market, continuing the trend that began in 2024. Limited buying interest weighs on the market sentiment as heavy rains in the south of Thailand begin to impact the supply.

While the market activities remained limited as buyers opted to stay on the sidelines, the worsening weather conditions tightened the supply for Thai rubber. Some market sources noted that the flood condition in Thailand is getting slightly serious, with some Thai producers being forced to shut factories for the rest of the week. 

Thai raw material prices, as a result, inched up during the day, with cup lump prices around THB 59.5–THB 60.5/kg and field latex around THB 67.5–THB 69/kg. Some market sources noted that this could be a nudge for the buyers, as the shortage might result in some panic buying. 

While the offers for STR 20 mixture ranged from US$2050-US$2060/mt on a CIF basis, the offers for STR 20 inched up to around US$2080-US$2090/mt on an FOB basis. There was very limited buying interest from China as well, with a few trades reported in the range of US$2000–US$2010/mt on a CIF basis. 

However, unlike the conditions seen earlier this year, the rains are largely restricted to the south of Thailand, which is likely to partially impact the production. Meanwhile, the Thai Meteorological Department has issued a warning for heavy to very heavy rainfall across thirteen Southern provinces, advising them to prepare for potential flash flooding as weather conditions worsen. In addition, there were indications of a transition from cool to cold temperatures across the northern regions.

Floods in Indonesia 

There have been reports of heavy rains in North Sumatra, which could potentially impact the rubber production if the weather conditions do not improve. Heavy rainfall since November 23 has impacted four districts in northern Sumatra, resulting in severe flooding and landslides. Climate change has intensified and reduced the predictability of recent extreme weather events in Indonesia.

The lack of offers from producers also discouraged regular buyers from entering the market. However, Indonesian farmgate prices, weighed down by the tepid demand, continued to move south, clocking a month-on-month drop of 5%. 

Spot firm ahead of the China’s tender results 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2030/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1920/mt FOB Belawan Surabaya, up US$10
• Helixtap assessed AFR10 US$1890/mt CFR Hamburg Rotterdam, up US$10
• Helixtap implied AFR10 US$1850/mt FOB Abidjan, up US$10

Helixtap ESG Prices guide (Based on Helixtap assessment and fixed premium basis)

• Helixtap ESG price guide AFR10 is US$1960/mt FOB Abidjan
• Helixtap ESG price guide for SIR20 is US$2020/mt FOB Belawan Surabaya

Market sentiment was “Slightly bullish” - Helixtap sentiment tracker 

The spot market continued with northbound movement during the Asian trade day ahead of the Chinese tender results due November 28, keeping the market participants apprehensive. Meanwhile, some strength in the US dollar and rains in Thailand also supported the physical prices. 

Buoyant spot prices but buying muted 

While there was some strength in the spot prices, the buying interest slowed over the day. Helixtap market sources report that there were some inquiries during the day, but they dwindled later in the day.

The market participants were puzzled as there is hardly any support from the market fundamentals for the prices to strength. A trader source noted that there are no fundamentals to support the current strength, and the firmness is more predominant in the futures market than the physical market. He added, "It appears to be a speculative move."

Part of the speculation may stem from the Chinese tender results, which are expected on November 28 and pertain to the stocks scheduled for rotation. Helixtap market intelligence suggests that China plans to tender reserve rubber, which includes 100,000 metric tons of RSS and 20,000 metric tons of SCRWF. The market is expected to experience some degree of impact; however, it is essential for market participants to comprehend the price level at which offerings are being made.

Meanwhile, China's price level remained largely rangebound, with the traded level of the STR 20 mixture hovering between US$2000 and US$2010/mt on a CIF basis. The buying interest has shifted towards forward months. However, the buying was largely restricted to arbitrage buyers this week. Regarding the tire makers, their interest is primarily focused on the upcoming months, suggesting that they may have already stocked up for Q1.

During the day, offers for SIR 20 on the international market ranged from US$1930 to US$1935/mt on a FOB basis. However, some sources noted that, despite being a public holiday in Indonesia, there were some producers on the market.  The buyers, nevertheless, opted to move to the sidelines after some inquiries earlier in the day. 

In addition, reports of rains in the south of Thailand are also impacting the pricing sentiment. Even though the market supply is not as tight as it was earlier this year, the prices are more susceptible to weather. 

Macro factors weighing on market psyche

Meanwhile, concerns regarding tariffs and the U.S. deficit are currently influencing market sentiment regarding the Federal Reserve's capacity to implement significant rate cuts.

On the other hand, China's October industrial profits experienced a decline, although the decrease was less pronounced compared to the prior month. This trend was attributed to ongoing deflationary pressures, coupled with persistently weak demand. The possibility of increased U.S. tariffs also poses risks to China's industrial sector in the upcoming year, potentially leading to a decline in export revenues.

Due to a prolonged property crisis and weak domestic demand, the extensive sector has struggled to maintain profitability. However, there is optimism that with the implementation of additional policy easing, the situation may improve in the upcoming year.

Spot braces for volatility as Trump’s tariff drive 

Helixtap Daily Physical Prices Assessment

• Helixtap assessed STR20 US$2020/mt FOB Bangkok Laem Chabang, up US$10
• Helixtap assessed SIR20 US$1910/mt FOB Belawan Surabaya, up US$5
• Helixtap assessed AFR10 US$1880/mt CFR Hamburg Rotterdam, down US$5
• Helixtap implied AFR10 US$1840/mt FOB Abidjan, down US$55