Japan rubber futures rise on supply concerns, tariffs limit gains
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Japanese rubber futures rose modestly on Monday, supported by concerns over declining supply from Thailand, the world’s top producer. However, escalating trade tensions between the U.S. and China weighed on sentiment, capping further gains.
The Osaka Exchange (OSE) rubber contract for August delivery increased by 1.8 yen, or 0.5%, closing at 362.2 yen ($2.41) per kilogram. Similarly, the Shanghai Futures Exchange (SHFE) rubber contract for May delivery gained 90 yuan, or 0.51%, reaching 17,755 yuan ($2,435.13) per metric ton. The butadiene rubber contract on SHFE also posted gains, rising 80 yuan (0.57%) to 14,005 yuan ($1,920.81) per metric ton.
Rubber markets are currently facing supply constraints as the industry enters its seasonal low-production phase, which typically lasts from February to May before peak harvesting begins in September. High raw material costs continue to exert upward pressure on prices, according to Chinese commodities data provider Longzhong Information. The situation is further compounded by Thailand’s weather forecast, which predicts isolated thundershowers from March 6-8, posing risks to crop yields.
Despite these supply-side pressures, trade concerns remain a dominant factor in market sentiment. U.S. President Donald Trump announced an additional 10% tariff on Chinese imports last week, bringing the cumulative tariff rate to 20%. This uncertainty has contributed to weaker performance in global rubber futures, as noted by the Japan Exchange Group.
Meanwhile, China’s tire production capacity utilization rate has risen, with most manufacturers maintaining high shipment levels. Additionally, China’s manufacturing activity expanded at its fastest pace in three months in February, providing some support to broader market confidence.
On the Singapore Exchange’s SICOM platform, the front-month rubber contract for March delivery last traded at 204.3 U.S. cents per kilogram, up 0.1%.
While supply constraints support rubber prices in the short term, ongoing trade uncertainties will likely continue to influence market movements. Traders will be closely watching further developments in U.S.-China trade relations and weather conditions in key producing regions for additional market direction.
The Osaka Exchange (OSE) rubber contract for August delivery increased by 1.8 yen, or 0.5%, closing at 362.2 yen ($2.41) per kilogram. Similarly, the Shanghai Futures Exchange (SHFE) rubber contract for May delivery gained 90 yuan, or 0.51%, reaching 17,755 yuan ($2,435.13) per metric ton. The butadiene rubber contract on SHFE also posted gains, rising 80 yuan (0.57%) to 14,005 yuan ($1,920.81) per metric ton.
Rubber markets are currently facing supply constraints as the industry enters its seasonal low-production phase, which typically lasts from February to May before peak harvesting begins in September. High raw material costs continue to exert upward pressure on prices, according to Chinese commodities data provider Longzhong Information. The situation is further compounded by Thailand’s weather forecast, which predicts isolated thundershowers from March 6-8, posing risks to crop yields.
Despite these supply-side pressures, trade concerns remain a dominant factor in market sentiment. U.S. President Donald Trump announced an additional 10% tariff on Chinese imports last week, bringing the cumulative tariff rate to 20%. This uncertainty has contributed to weaker performance in global rubber futures, as noted by the Japan Exchange Group.
Meanwhile, China’s tire production capacity utilization rate has risen, with most manufacturers maintaining high shipment levels. Additionally, China’s manufacturing activity expanded at its fastest pace in three months in February, providing some support to broader market confidence.
On the Singapore Exchange’s SICOM platform, the front-month rubber contract for March delivery last traded at 204.3 U.S. cents per kilogram, up 0.1%.
While supply constraints support rubber prices in the short term, ongoing trade uncertainties will likely continue to influence market movements. Traders will be closely watching further developments in U.S.-China trade relations and weather conditions in key producing regions for additional market direction.