China recently approved a new standard formula that sees the amount of natural rubber reduced in a move which analysts predict will hurt Thai and Malaysian rubber markets.
Compound rubber, which includes small amounts of powdered carbon, is popular in China as it is imported tariff-free, compared to a 1,500 yuan (US$242) per tonne tariff for natural rubber.
Thailand ships about 600,000 to 700,000 tonnes of compound rubber to China, a Singapore-based trader said, while Malaysia exports slightly less. The total use is around 1.5 million tonnes.