In June 2025, the Asian Natural Rubber (TSR) market continued to experience bearishness in its trend. This consistent decline in the prices of Natural Rubber (TSR) was witnessed amid the short-term oversupply in the key production regions, rising port inventories, and the market unceranity due to the trade tariffs. In addition, the rubber production subsidy in Malaysia started in June 2025.
This month, the Natural Rubber (TSR) prices in Thailand experienced a slight surge of 0.52% further deepening the bearish sentiments. Thailand is the world’s largest exporter of Natural Rubber (TSR) , followed by Vietnam and Malaysia, and all of them experienced a declining trend. Natural Rubber (TSR) -producing areas such as Thailand and Indonesia have entered a period of increased production. The expected increase in global supply remains unchanged, and the price of Natural Rubber (TSR) raw materials is expected to continue to decline in the later stage. Therefore, amid the continued rise in production levels, the supply of the commodity witnessed a surge, and the demand for the commodity remained limited. The demand for the commodity was impacted by the ongoing market uncertainty, as the 90-day halt on the trade tariff by Trump was about to come to an end. Therefore, market players adopted a cautious approach and were only willing to purchase the commodity at a lower rate.
Amid the declining prices of Natural Rubber (TSR) , the government of Malaysia chose to interefer in between and introduced the Rubber Production Subsidy (IPG) program in June 2025 to provide support to the smallholders in Peninsular Malaysia, Sabah, and Sarawak. This subsidy was introduced as the prices for cup rubber fell below the threshold which created an urgency to support the farmer’s livelihoods.
In terms of the demand, the manufacturers of Natural Rubber (TSR) , along with the downstream industries, continued to operate cautiously to prevent the further worsening of the market sentiments of the commodity. Current tire output in China, one of the major importers of Natural Rubber (TSR) is under pressure.
Market activity remains subdued, with most downstream buyers taking a wait-and-see approach. The transaction prices weakened due to limited buying interest. Inventory levels in Qingdao continued to climb, reaching over 632,000 tons, exacerbating concerns of oversupply. Meanwhile, stocks of butadiene rubber and upstream butadiene dropped, indicating some tightening on the raw material front, though not enough to offset broader market weakness.
Overall, the Natural Rubber (TSR) market remains under significant bearish pressure, driven by supply-side surpluses and a hesitant demand outlook. Without a clear rebound in consumption, particularly from the automotive sector, price recovery may remain delayed despite expectations of tightening fundamentals in the months ahead. Forecasts suggest that Thailand’s rubber production will grow by about 3% in 2025, buoyed by favorable weather and expanded tapping areas, heightening concerns about managing the surplus.
