High demand buoys Vietnam rubber export prices in 2024

Vietnam posted a year-on-year increase of 18% in rubber exports to earn $3.4 billion in 2024 despite a 6% decline in volume to 2 million tons, primarily driven by high prices.

The sum includes $1.2 billion worth of rubber products, rising over 13% from the previous year, according to Vietnam Customs.

Meanwhile, about 1.9 million tons valued at $3 billion were imported last year, leading to a trade surplus of $400 million, statistics showed.

Le Thanh Hung, chairman of the Vietnam Rubber Association (VRA), attributed export growth to a surge in prices which averaged $1,701 per ton in 2024, much higher than the 2023 average of $1,350 per ton. As a result, despite a drop in volume, the export value still increased.

The Association of Natural Rubber Producing Countries (ANRPC) noted that in 2024, the global natural rubber output stood at 11.2 million tons while total demand reached 12.1 million tons, causing a supply shortage of about 900,000 tons.

Nguyen Duc Dung, deputy general director of the Mercantile Exchange of Vietnam, further explained that rubber prices stayed high in the final months of last year based on this limited global supply and high demand.

Natural rubber output declined in countries that lead in production, while global demand, especially in China – the world’s biggest rubber importer, kept rising.

China implemented expansionary monetary and fiscal policies to stimulate its economy, inspiring expectations for a strong economic rebound and driving rubber demand in manufacturing sectors.

The VRA forecast a year of even more robust growth for Vietnam’s rubber industry in 2025, with exports possibly eclipsing $11 billion, an increase of 10% from the previous year, with the sustainable value of environmentally friendly and recycled materials maximised.

Domestic and international prices in early 2025 will be largely dependent on the effect of economic policies of China, the top importer of Vietnamese rubber, where heavy investments in industrial projects, especially car tyre and industrial equipment manufacturing, may fuel demand for rubber materials, keeping prices high in the short term.

Rubber export will be guaranteed by high demand in China as well as Southeast Asian countries, especially coupled with the gradual economic recovery worldwide, Dung opined.