BOCOM Futures: Rubber Sector Shows Mixed Strength, BR Under Pressure and Declining

Natural rubber enters a stage of reduced supply and increased demand. On the supply side, domestic production areas have halted tapping, overseas in northern Thailand production has decreased, and southern Thailand’s output will also enter a low-yield period. Raw material prices rose during the domestic long holiday. On the demand side, downstream demand is expected to increase month-on-month after the Lantern Festival, with attention to inventory changes in the rubber trade segment. According to Longzhong Information, as of February 23, 2026, the total inventory of bonded and general trade natural rubber in Qingdao is 667,700 tons, an increase of 61,000 tons or 10% compared to before the holiday. Bonded zone inventory is 110,800 tons, up 12%; general trade inventory is 556,900 tons, up 9.7%. In terms of valuation, the premium of RU over old full latex is lower than in previous years, and futures inventories are at historic lows. Additionally, although NR has introduced rules for substitution delivery, actual futures inventories are also at historic lows.

Processing profits for cis-1,4-polybutadiene rubber (BR) improved before the holiday, and the previous negative profits had a relatively small negative feedback on supply. Meanwhile, the continuous increase in the operating rate of raw material butadiene has led to increased domestic production, offsetting the depletion of port and warehouse stocks. BR is supported by costs below, but its rebound potential is limited by supply-side factors and futures inventories, resulting in weaker valuation compared to natural rubber. For reference. (Bank of China Futures)