Core Viewpoints - The current conflict does not have a foundation for a long-term hot war, and the probability of a full-scale war is very low [1][17] - If the conflict ends before September, the rubber tapping disruption may lead to a reduction of 0.5 to 2.62 million tons in Thailand's production, which is relatively limited in impact [1][17] - The expectation for continued production growth in Southeast Asia remains unchanged, but the future increment is still under discussion; the supply of natural rubber is strong while demand is weak, leading to ongoing inventory accumulation and a stable fundamental outlook, with potential short-term fluctuations due to war factors [1][17] Conflict Background - The conflict arises from the disputed 817-kilometer land border between Thailand and Cambodia, particularly concerning the Preah Vihear Temple and surrounding 4.6 square kilometers of land, which Thailand claims sovereignty over despite a 1907 treaty that assigned it to Cambodia [1] Timeline of Events - Initial skirmish occurred on May 28, followed by a landmine incident and escalating diplomatic tensions in July, culminating in armed conflict on July 24, resulting in casualties on both sides [2] Supply Impact - The main conflict area accounts for 5.63% of Thailand's total rubber production, with the northeastern region (Surin, Si Sa Ket, Ubon Ratchathani) projected to produce 26.98 million tons in 2024, representing 29.27% of the country's total output [4][5] - If rubber tapping resumes before August, the maximum production reduction in July is estimated at 0.5 million tons; if the conflict continues into August, the reduction could reach 2.12 million tons [7][8] Market Conditions - As of July 25, the prices for natural rubber in Thailand showed slight fluctuations, with the price for cup rubber at 50 THB/kg and sheet rubber at 63.11 THB/kg, while the spot market in Qingdao saw an increase of 40 USD/ton [11]