Natural Rubber: Focus on Long‑Position Opportunities Amid Supply Dynamics and Macro‑Level Synergies

2023-07-20

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Next year, natural rubber supply is expected to remain at low growth. Since 2013, newly planted acreage has declined annually, and southern Thailand has entered a sustained phase of production cuts. Meanwhile, Indonesia is also grappling with the aging of its rubber tree population, reinforcing a clear downward trend in output. In terms of tapping area share, in 2022, Thailand and Indonesia—the two major producers in Southeast Asia—accounted for 90.78% and 80.07%, respectively, indicating that their production capacity has essentially reached a ceiling. Import pressures have eased somewhat, yet weather-related disruptions persist, with the El Niño effect still lingering. On the demand side, domestic passenger car sales are projected to maintain steady growth, while exports are expected to remain resilient. However, the weakening of heavy‑truck demand could weigh on tire demand, so overall demand is likely to stay broadly stable.

Looking ahead to 2024, price dynamics for natural rubber are expected to be driven primarily by supply-side factors. At the same time, attention should be paid to macroeconomic developments, including the introduction of domestic stimulus measures, expectations of Fed rate cuts, and an easing of U.S.–China relations. A broader macroeconomic recovery could provide additional support to prices, increasing the likelihood that the price center of gravity will shift higher next year. We project a futures price range of 13,500–16,000, with opportunities to capitalize on the prevailing market logic at different price levels and key junctures—for example, adopting a buy‑on‑dips strategy during phases when overall commodity markets reflect a macroeconomic recovery.

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Rubber: Respect the Seasons, Prioritize Structure