Rubber prices saw active trading on Christmas Day, a day when the market was closed for the holiday.

At the close of trading yesterday, rubber prices rose 1.18% to $2,404 per ton, driven by expectations of further economic stimulus policies from China.

The Vietnam Commodity Exchange (MXV) reported that yesterday (December 25th), most major commodity exchanges worldwide were closed for Christmas. RSS3 rubber was the only commodity that remained relatively active on the Osaka Commodity Exchange. At closing, its price rose 1.18% to $2,404 per ton, driven by expectations of further economic stimulus policies from China – a country that plays a crucial role in global rubber trade.

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Rubber product price list

Yesterday, rubber prices received significant support from news that China – the world's largest consumer and importer of rubber – signaled it would continue implementing expansionary fiscal and monetary policies to revive its economy.

According to an announcement from China's Ministry of Finance , the country plans to strengthen financial support for consumption next year by increasing pensions and health insurance subsidies for citizens, and expanding consumer barter programs. In addition, the Chinese government has agreed to issue 3 trillion yuan (US$411 billion) in special treasury bonds next year, aiming to boost fiscal stimulus to revive the weakening economy.

This move comes as Beijing prepares to counter the impact of increased US tariffs on Chinese imports when President-elect Donald Trump officially takes office for his second term in January 2025.

Previously, China had actively implemented a series of fiscal and monetary policies to revive its sluggish economy. This information positively impacted market sentiment regarding the prospects for rubber consumption in the populous nation, thereby keeping rubber prices pegged at high levels in the final months of 2024.

Along with economic policies, the automotive industry, a key consumer of rubber in the country, has also shown signs of improvement, building confidence in future demand growth. The China Association of Automobile Manufacturers reported that in November, China's automobile production and sales reached 3.43 million and 3.31 million units respectively, up 14.7% and 8.6% from the previous month; and 11.1% and 11.7% year-on-year. For the first 11 months of 2024, China's automobile production and sales reached 27.9 million and 27.94 million units respectively, up 2.9% and 3.7% year-on-year. This growth rate is 1.1 percentage points and 1 percentage point higher than the rates recorded in the January-October period.

On the supply side, the market remains concerned about the rubber supply situation in major producing countries. According to the latest report from the Association of Natural Rubber Producing Countries (ANRPC), global natural rubber production in November reached approximately 1.4 million tons, up 3.7% from the previous month but down 1.1% from the same period last year. Cumulatively, in the first 11 months of the year, global natural rubber production is estimated to have increased by 2.3% to 12.7 million tons.

Conversely, natural rubber consumption in November reached over 1.27 million tons, down 1.4% from the previous month but up 2.5% year-on-year. This brought total global rubber consumption down 2.8% in the first 11 months, to over 13.5 million tons.

Although production growth is higher than consumption growth, this forecast still shows a global output shortfall of approximately 841,000 tons compared to consumption.

According to statistics from the General Department of Vietnam Customs, in the first 15 days of December, Vietnam's rubber exports reached over 115,300 tons, a decrease of 13% in volume but an increase of 18% in value compared to the same period last year. Cumulatively from the beginning of the year to December 15th, the total volume of Vietnam's rubber exports was 1.89 million tons, a decrease of 6% in volume but an increase of 17% in value compared to the same period in 2023. The growth in export value is due to a significant increase in the average export price of rubber compared to last year.

In particular, the export price of rubber to its largest export market, China, increased sharply compared to the same period last year. In November 2024, the average export price of rubber to this market reached US$1,905/ton, a 40% increase compared to the previous month. For the first 11 months of this year, the average export price of rubber to China reached US$1,653/ton, a 24.8% increase compared to the same period last year.

At the close of trading yesterday, rubber prices rose 1.18% to $2,404 per ton, driven by expectations of further economic stimulus policies from China.

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