Rubber Price

Rubber is an important industrial product which is used in numerous industries, including the agricultural industry. There are actually two types of rubber, namely:

• Natural rubber, which is produced from a liquid, called latex, obtained from rubber trees.
• Synthetic rubber, a product made from crude oil and petroleum by-products.

 

Quick Overview of Rubber

✔️An overview of rubber
✔️A short history of rubber
✔️The production of rubber
Trading rubber as a commodity
Factors driving the price of rubber as a commodity
The uses of rubber
Worth knowing

 

An overview of rubber

There is a difference of opinion between commodity analysts and commodity brokers about the categorisation of rubber as a commodity. Some regard it as a hard commodity, implying that it is extracted, while others view natural rubber as a soft commodity, categorising it further as a miscellaneous agricultural commodity, together with lumber and wool. Apparently, the latter classification is based on the fact that the latex is harvested from the rubber tree.

The tree Hevea brasiliensis is the primary source of natural rubber. The tree is also known as the Para rubber tree or rubberwood. It is renowned for its milky white fluid, called latex, which contains rubber. The fluid (sap) is extracted from the rubber tree by making an incision in the bark of the tree.

Some other features of Hevea brasiliensis:

• It is fast growing, reaching 25 metres in rubber plantations and 40 metres in the wild.
• Its trunk, from which the latex is tapped, is smooth and straight, with a greyish bark.
• The rubber tree starts bearing fruit when it is four years old. Each fruit, containing three to four seeds, bursts open when ripe, scattering the seeds in a wide area around the tree.

In rubber tree plantations, growers plant the seeds in rows, spacing them in a manner that allows the trees to receive optimal sunlight.

The rubber tree is indigenous to the tropical rainforests in the Amazon region in the northern part of South America in countries such as Venezuela, Ecuador, Colombia, Bolivia, and Brazil. The distribution of the rubber tree was extended when it was introduced to countries such as Indonesia, Thailand, and Malaysia in South-East Asia, and Cote d’Ivoire in Africa.

According to historians, in 1876, the English discoverer and adventurer, Henry Wickham (1846 – 1928), smuggled 70 000 seeds of the rubber tree to England where they were planted in London’s Kew Gardens. Only 2 700 of the seeds had successfully germinated. Some of them were distributed to countries such as Malaysia, Singapore, and Ceylon (now known as Sri Lanka).

The rubber tree performs best in the following environment:

• Daily temperatures are between 26 degrees and 28 degrees Celsius.
• In regions between latitudes 15° North and 10° South.
• An annual rainfall ranges from 2 000 to 3 000 millimetres.
• Prefers well-drained soils.
• Altitudes from sea level up to 600 metres, with the ideal altitude below 200 metres above sea level.

 

A short history of rubber

Interesting facts about the history of rubber:

• History has it that, as long ago as 1600 BCE, peoples in Mexico, and Central and South America, formed balls to play certain ball games with the latex harvested from rubber trees. Liquid rubber was also used in rituals, for medicines, and to paint. Over time, it was discovered that rubber was waterproof, enabling humans to make water-resistant clothes.
• In the early 1490s, the discoverer, Christopher Columbus, was the first European to encounter rubber when he noticed the native Americans playing games with balls made from rubber.
• When rubber was introduced to the Europeans, rubber products made little impact on them. Moreover, they were so shocked by the properties of this unknown product that they considered it witchcraft.
• In 1770, Joseph Priestley (1733 – 1804), the English chemist and discoverer of oxygen, noticed that pencil markings can be removed using rubber. In fact, it was Priestley who gave the product its English name, ‘rubber,’ deriving from the verb ‘to rub out.’
• In 1839, Charles Goodyear (1800 – 1860), a citizen of the USA, invented the vulcanisation (also spelled vulcanization) process in which rubber is treated with sulfur and heat, which hardens the rubber but keeps its elasticity. This process prevents the rubber from melting in the summer and cracking in the winter. Goodyear’s invention was patented in 1844.
• Rubber was used as an essential material during the Industrial Revolution in the eighteenth and nineteenth centuries.
• The world’s first synthetic rubber was patented on 12 September 1909 in Germany.
• By 1910. Asian countries, using seeds obtained from trees in the Amazon Basin in South America, became the major source of natural rubber.

 

The production of rubber

• Major natural rubber-producing countries

Thailand is the biggest global producer of natural rubber. The country produces more than 4.3 million metric tonnes of natural rubber annually, which accounts for a 35 percent share of natural rubber production in the world.

Indonesia’s yearly production of natural rubber is almost 3.1 million metric tonnes, making it the second biggest global producer of natural rubber, with a 25 percent share of the global natural rubber market. Combined, Thailand and Indonesia produce 60 percent of the world’s natural rubber.

The countries producing approximately 40 percent of the world’s natural rubber are Malaysia, India, China, Vietnam, Philippines, Cote d’Ivoire, Guatemala, and Brazil.

Nowadays, about 90 percent of the world’s natural rubber is produced in Asia.

 

• Largest global producers of synthetic rubber

As of 2025, China is the largest producer of synthetic rubber in the world. Other major synthetic producers are South Korea, Thailand, Japan, the USA, and Vietnam.

 

• Producing natural rubber

The steps involved in the production of natural rubber are as follows:

 

Tapping

Tapping refers to the process in which the latex is collected from the rubber tree. It takes five to seven years for a rubber tree to be ready for tapping. The tree becomes economically viable after seven years. Depending on the skill of the tapper and bark preservation, tapping can continue for 10 to thirty years.

A rubber tree tapper uses a hook-shaped knife to make a downward spiral cut in the bark of the tree, exposing the latex vesicles and allowing the latex to flow towards one point where it is collected in a small aluminium or glass container. The incision is made on one half of the tree, enabling the other side to heal.

Typically, tapping is executed during the night or early morning during low temperatures. This is done to prevent the latex from clogging and to maximise the quantity of latex harvested.

 

Coagulation

Part of the water in the collected latex is extracted from it, leaving a minimum of at least 60 percent latex. A dilute acid is added to the latex, causing it to coagulate. After coagulation, the excess liquid needs to be extracted from the rubber, using a number of rollers.

 

Calendering

Rollers, called calender rollers, are now used to squash the raw rubber into predetermined shapes.

 

Vulcanisation

Vulcanisation refers to the process of adding sulfur to the rubber and heating it to a temperature of 121.11 degrees Celsius (250 degrees Fahrenheit). This process makes the rubber stronger and more durable.

 

• Producing synthetic rubber

During World War II, the importation of natural rubber from Asian countries was cut off, causing the production of synthetic rubber as substitute due to the strategic importance of rubber.

Although scientifically made, synthetic rubber is just as reliable as natural rubber. There is a variety of synthetic rubbers produced, each for different purposes. Examples of synthetic rubbers are neoprene, styrene-butadiene rubber (SBR), and butyl rubber, to name a few.

The steps described below ‘loosely outline the general steps involved in the processing and manufacturing of a typical synthetic rubber,’ as explained by Aquaseal Rubber Limited, a company based in the northeast of England. Furthermore, each step ‘may change slightly depending on the chosen type of rubber.’

 

1. Naphtha, a flammable liquid hydrocarbon mixture that derives from petroleum, is combined with natural gases. This reaction creates monomers, like styrene-butadiene rubber, butyl rubber, and nitrile rubber, binding molecules together to create polymers. (A polymer is defined as a chemical compound that contains large molecules made of various smaller molecules of the same kind.)

 

2. Chemical agents are applied to transform the individual polymers into polymer chains, forming a rubber substance.

 

3. The same process used in the processing of natural rubber, vulcanisation, is applied.

 

4. The rubber is then moulded into different shapes, enhancing its usefulness.

 

5. Finally, the product is subjected to quality assurance checks.

By the end 1950s/early 1960s, the production of synthetic rubber replaced natural rubber in the number one position. Nowadays, about 70 percent of all rubber used is synthetic.

 

Trading rubber as a commodity

If you are interested in how to trade rubber, you will need the services and guidance of a trusted and registered commodity broker. A commodity broker will help you to determine your risk appetite, and provide a trading platform, and information about trading instruments that enable you to trade rubber as a commodity.

Trading instruments allowing rubber trading are, amongst others:

 

• Rubber futures contracts

Put simply, a rubber futures contract is a binding agreement between two parties, agreeing to buy/sell rubber at a specified time in the future with a predetermined price.

Both the Tokyo Commodity Exchange (TOCOM) and the Shanghai Futures Exchange (SHFE) provide a futures contract on rubber. The TOCOM contract is based on the underlying rubber type: Ribbed Smoked Sheet (RSS) no. 3 Rubber. It has a contract size of 5 metric tonnes. The SHFE contract size is 10 tonnes of natural rubber.

Bear in mind, that futures contracts are high-risk and not recommended for novice traders.

 

• Rubber exchange-traded funds (ETFs)

ETFs trade as shares on stock exchanges similar to the trading of ordinary shares. There are no ETFs that invest in physical rubber. However, there are exchange-traded notes (ETNs) that invest in agricultural commodities, including natural rubber. For instance, the ELEMENTS Rogers International Commodity Agricultural ETN.

 

• Shares of public rubber companies

Unfortunately, there are no publicly traded companies that are directly involved in rubber production. Rubber plantations are mostly privately owned.

Although, there are numerous public companies that are involved in the manufacturing of rubber products, such as tyres. The leading tyre manufacturers are:

• Michelin (France)
• Bridgestone (USA)
• Goodyear (USA)
• Continental (Germany)
• Pirelli (Italy)
• Sumitomo (Japan)
• Yokohama (Japan)

 

 

Factors driving the price of rubber as a commodity

Both natural rubber and synthetic rubber are affected by supply factors and demand factors.

There are several key factors that can influence the price of rubber:

• Production in the world’s biggest natural rubber-producing countries

As mentioned, Thailand and Indonesia produce 60 percent of the world’s natural rubber. Any disruptions like political unrest and labour disputes in these countries can have an impact on the price of rubber.

 

• Global demand

More than 75 percent of global rubber production is used in the automotive industry, mainly in the manufacturing of tyres. Countries like China and India have large automotive industries, representing a considerable portion of the global rubber demand.

Motor vehicles are a discretionary consumer item, implying a strong global demand can boost the demand for vehicles, while a weak global economy can decrease demand.

 

• Weather conditions

Rubber trees are cultivated in tropical regions and require specific conditions. Adverse weather conditions such as torrential rain can cause flooding, which can prevent the harvesting of latex, disrupting the supply chain.

 

• Crude oil prices

Although close substitutes, natural rubber, and synthetic rubber are essentially in competition with each other. Since synthetic rubber is produced from crude oil, crude oil prices affect the prices of synthetic rubber, which consecutively, can influence natural rubber prices.

For instance, rising crude oil prices drive the price of synthetic rubber higher, which could improve demand for natural rubber, and vice versa.

Typically, increases in crude oil prices are caused by the lowering of production levels by the Organisation of the Petroleum Exporting Countries (OPEC), the Russian-Ukraine War in 2025, and subsequent sanctions imposed on Russia by numerous countries.

 

• Government and trade policies

Government policies concerning tariffs and subsidies in top rubber-producing countries can affect the levels of supply and demand.

Furthermore, the International Tripartite Rubber Council (ITRC), comprising Thailand, Indonesia, and Malaysia, has in the past instituted restrictions on rubber exports to help boost rubber prices.

 

• Strength of the US dollar

The US dollar is the global reserve currency which can often dictate the direction of commodity prices, including rubber prices.

For instance, when the value of the US dollar decreases against other currencies, it requires more dollars to buy rubber than it does when the price is high. Put differently, sellers of rubber receive fewer dollars for their product when the dollar is strong, and vice versa.

 

The uses of rubber

The world’s largest consumers of natural rubber:

• China (31%)
• European Union (EU), comprising 27 countries (19%)
• USA (12%)
• Japan (9%)
• Malaysia (8%)

 

The major global consumers of synthetic rubber:

According to Statista, the top consumers of synthetic rubber in the world in 2025 were:

• China (31%)
• European Union (EU) (14%)
• USA (11%)
• Japan (5%)
• India (4%)
• Rest of the world (35%)

 

The uses of rubber

As an important industrial material, rubber is an inescapable part of our everyday life. Actually, rubber is so important that it is listed by the European Union (EU) as a critical raw material, included in a list of commodities with high supply risk.

Rubber is used in numerous everyday products across multiple industries. For example:

• Automotive industry

Tyres for vehicles, bikes, and aircraft are the primary use for rubber (both natural and synthetic rubber). Rubber is also used in off-road vehicles. Approximately 75 percent of global rubber production is used in the manufacturing of tyres.

Other uses include brake pads, airbags, floor mats, gaskets, and seals on windshields and windows.

• Clothing and footwear

Rubber is used in numerous clothing and footwear products, such as stretchable clothing, wetsuits, cycling shorts, gumboots, and rubber soles for shoes.

• Industrial

Rubber is used in machinery, floors for animal shelters and playgrounds, conveyor belts, hoses, sealing products, and moulded rubber goods, to name a few.

• Other miscellaneous products

Numerous other miscellaneous products are manufactured from rubber. Examples are erasers, rubber gloves, condoms, surgical gloves, and gaskets for mechanical components.

 

Worth knowing

• The latex proteins in natural rubber produced from the Hevea brasiliensis tree can cause severe allergies in certain people, even when they are exposed to significant low quantities.
• Although the rubber tree is native to the Amazon region in South America, only one country, Brazil, of that region is currently included in the list of the top 10 global producers of natural rubber – and only in position 10.

 

Note: This article does not constitute investment, financial, or trading advice. Please obtain the advice of a professional and regulated commodity broker before making trading and investment decisions.