Natural Rubber (TSR) Price Index: Recent Quarterly Update & Market Analysis

Natural Rubber (TSR) Price Index Q2 2025: Global Downtrend Amid Weak Demand and Oversupply

The Natural Rubber (TSR) Price Index exhibited a marked bearish trend across major global markets in Q2 2025, reflecting subdued demand conditions and sustained oversupply in key producing regions. With downstream sectors such as automotive and manufacturing facing muted growth, the global natural rubber (TSR) market endured consistent downward pressure. The quarter saw notable declines in the Price Index across North America, Asia-Pacific (APAC), and Europe, underscoring structural headwinds within the global rubber supply chain.

Overview of the Global Natural Rubber (TSR) Price Index in Q2 2025

In the second quarter of 2025, the Natural Rubber (TSR) Price Index remained bearish across all major regions. Market fundamentals weakened primarily due to declining tire manufacturing activity, soft automotive demand, and an oversupply situation aggravated by favorable weather conditions in producing countries like Thailand, Indonesia, and Malaysia.

The price trend for natural rubber was additionally affected by falling crude oil prices, which reduced the production costs of synthetic rubber and thereby heightened competitive pressure on natural rubber markets. Across major consuming regions, procurement activity slowed as manufacturers drew down inventories accumulated in previous quarters.

North America: Natural Rubber (TSR) Price Index Trends

Decline in Q2 2025

In North America, the Natural Rubber (TSR) Spot Price declined sharply by 10.68% quarter-over-quarter in Q2 2025, marking a sustained bearish phase in the regional market. The U.S. Natural Rubber (TSR) Price Index exhibited a consistent downward movement throughout the quarter, reflecting sluggish demand from key downstream industries and continued import competition.

Factors Driving the Price Decline

The decline in North American rubber prices was primarily attributed to:

• Weak demand from the automotive and tire manufacturing sector, which continued to operate below capacity due to tepid vehicle production and inventory optimization by manufacturers.
• Increased import availability from Asia, where exporters sought to offload excess stock at competitive prices.
• Lower crude oil prices, which enhanced the competitiveness of synthetic rubber alternatives.

Despite steady economic activity in the broader industrial sector, the natural rubber market faced a mismatch between supply and consumption. Importers in the U.S. reported higher inventory levels, leading to cautious buying patterns and limited restocking activity during the quarter.

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Industrial Consumption and Market Dynamics

The automotive sector, accounting for nearly two-thirds of rubber consumption, continued to face cost optimization pressures. With slower sales in both passenger and commercial vehicle segments, tire manufacturers reduced procurement volumes.
Additionally, rubber goods producers and industrial fabricators adopted a conservative procurement strategy amid expectations of further price declines.

Outlook for North America

Looking forward, the Natural Rubber (TSR) Price Index in North America may stabilize slightly in Q3 2025, supported by moderate restocking activities and potential seasonal demand improvements. However, without a rebound in vehicle production or construction activities, prices are likely to remain under downward pressure in the medium term.

Asia-Pacific (APAC): Deep Decline in Natural Rubber (TSR) Prices

Q2 2025 Performance

The Natural Rubber (TSR) Spot Price in the Asia-Pacific region decreased sharply by 17.7% quarter-over-quarter in Q2 2025, signaling a pronounced bearish trend in the world’s largest production and export hub.
In Indonesia, a key producer and exporter of Technically Specified Rubber (TSR), the Price Index dropped significantly due to persistent supply-demand imbalances and high stock availability.

Supply-Side Pressures

Ample production across Southeast Asia exerted downward pressure on rubber prices:

• Indonesia, Thailand, and Malaysia witnessed favorable weather conditions that supported higher tapping rates and latex yields.
• Despite efforts to manage exports through production controls and cooperative agreements, most producers struggled to curtail output amid weak domestic demand.
• Inventory accumulation at major ports led to aggressive export offers, particularly toward China and other Asian buyers.

Demand Weakness Across the Region

On the demand side, China’s rubber consumption weakened in Q2 2025 as its automotive production growth decelerated and tire exports softened due to declining orders from the U.S. and Europe.
Furthermore, India’s rubber market remained under pressure due to muted tire replacement demand and lower consumption in industrial manufacturing.

Currency and Trade Impacts

The depreciation of regional currencies such as the Indonesian Rupiah against the U.S. dollar slightly offset the revenue losses for exporters. However, it also made imports costlier for downstream manufacturers, limiting their purchasing appetite.
Trade activities across Southeast Asia and East Asia were further hindered by higher freight rates and extended shipping times, though these logistical issues were partially mitigated by stable fuel costs.

Outlook for APAC

For Q3 2025, the APAC rubber market may experience mild stabilization if producers implement effective supply management strategies. However, the overall sentiment remains bearish, and the Natural Rubber (TSR) Price Index is expected to stay subdued unless there is a tangible recovery in Chinese automotive demand or a reduction in production volumes.

Europe: Downward Momentum Persists Amid Weak Automotive Demand

Regional Price Movement

In Europe, the Natural Rubber (TSR) Spot Price declined by 11.36% quarter-over-quarter in Q2 2025, reflecting a persistent bearish sentiment across the region.
The Natural Rubber (TSR) Price Index in Germany, one of Europe’s key automotive and industrial manufacturing hubs, trended downward through the quarter, largely driven by ample global supply and diminishing demand from tire and automotive components sectors.

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Key Market Drivers

1. Automotive Sector Slowdown:
   European automotive manufacturers faced sluggish new vehicle registrations and moderate exports, particularly in Germany, France, and Italy. The transition toward electric vehicles (EVs) also reduced natural rubber usage due to differing tire design and material requirements.
2. Abundant Global Supply:
   Imports from Asia continued to flow into the European market at discounted prices, intensifying competition among distributors and compressing profit margins.
3. Economic Uncertainty:
   The broader European economic environment, influenced by inflationary pressures and high interest rates, curtailed consumer spending and industrial output, indirectly weighing down rubber consumption.

Trade and Supply Chain Dynamics

The European rubber industry continued to face logistical challenges, including delays in port clearances and slower freight movement. However, these supply chain disruptions did not translate into price support due to the overwhelming availability of rubber globally.

Rubber compounders and tire manufacturers, particularly in Germany and the Netherlands, maintained cautious procurement strategies, preferring short-term contracts and spot purchases over long-term commitments.

Outlook for Europe

In the upcoming quarter, the Natural Rubber (TSR) Price Index in Europe is likely to remain under downward pressure. Although some improvement may occur if automotive demand recovers modestly in Q3 2025, structural overcapacity and weak export markets will likely restrain significant price rebounds.

Comparative Regional Analysis

The comparative data reveals that the Asia-Pacific region experienced the steepest decline due to its dual role as both a major producer and exporter. In contrast, North America and Europe reflected downstream weakness stemming from reduced manufacturing and vehicle production.

Macroeconomic and Raw Material Influences

The Q2 2025 performance of the Natural Rubber (TSR) Price Index was also shaped by several macroeconomic and commodity factors:

• Crude Oil Prices: Lower oil prices reduced synthetic rubber costs, prompting buyers to switch away from natural rubber in certain applications.
• Global Inflation Trends: High interest rates in major economies limited industrial investments and consumer spending, indirectly curbing demand for rubber products.
• Freight and Logistics: Despite easing shipping costs, freight inefficiencies continued to disrupt supply timelines, but without adding upward pressure to prices due to oversupply.
• Currency Volatility: Exchange rate movements in Southeast Asia influenced exporters’ competitiveness but failed to offset the overall bearish sentiment.

Forecast and Market Outlook

The Natural Rubber (TSR) Price Index outlook for the second half of 2025 remains moderately bearish, with potential stabilization contingent on improved downstream demand and tighter supply management.

Short-Term Forecast (Q3 2025)

• Prices may recover marginally due to restocking activities and potential seasonal demand improvements.
• A modest rebound in Chinese industrial output could offer limited support to global prices.

Medium-Term Outlook (Q4 2025 and Beyond)

• Persistent global oversupply and structural shifts in automotive manufacturing (toward EVs) are expected to keep the Natural Rubber (TSR) Price Index under long-term pressure.
• Producers may adopt export quota systems or production curbs to stabilize market sentiment.
• The development of new rubber-based applications in renewable energy and healthcare could provide emerging demand opportunities, albeit limited in the short run.

Conclusion

The Natural Rubber (TSR) Price Index faced widespread declines in Q2 2025 across North America (-10.68%), APAC (-17.7%), and Europe (-11.36%), signaling a unified global downturn driven by oversupply and weak end-use demand. While regional dynamics vary, the overarching theme remains one of subdued market sentiment.
In the near term, stabilization efforts by major producers and a gradual recovery in industrial activity may offer partial support. However, unless downstream consumption revives meaningfully—especially in the automotive and tire sectors—the global Natural Rubber (TSR) Price Index is likely to remain in a low-price environment through the remainder of 2025.

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