Global Rubber Market Faces Shortages in 2025

The global rubber market is heading for another year of tight supply in 2025, with natural rubber production expected to rise only 0.3%, while demand is forecast to grow 1.8%, according to the Association of Natural Rubber Producing Countries (ANRPC). This would mark the fifth consecutive year where supply falls short of demand, putting upward pressure on prices in the long term.

Rubber remains essential across industries, including automotive parts, industrial goods, footwear, conveyor belts, and medical equipment. The global rubber market is projected to reach $65.7 billion by 2030, driven by steady demand across these sectors.

Natural rubber production has been lagging, particularly in top-producing countries like Thailand, Indonesia, Vietnam, and Malaysia. Severe weather events have played a major role. Thailand, which saw a significant heatwave in early 2024 followed by heavy flooding, experienced an extended low production season and stunted tree growth. 

China's rubber-producing regions, including Hainan Island, have also been hit by typhoons and heavy rains, damaging output. Between 2017 and 2022, Thailand’s rubber cultivation area dropped 4.5%, impacted by extreme weather, rising labor costs, and disease outbreaks like leaf flow disease.

What Does This Mean for Me?

Rubber futures fell 4% this week to 195 US cents per kilogram, down 4.8% over the month, as markets balanced supply concerns with ongoing trade tensions. Competition from synthetic rubber, made from petrochemical sources, has also weighed on prices.