Japan’s rubber futures end week flat amid tightening supply and tariff
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Japanese rubber futures surged on Friday, driven by a softening supply outlook from Thailand and expectations of Chinese stimulus measures. However, market momentum remained subdued throughout the week as investors weighed the potential impact of escalating global tariffs.
The Osaka Exchange (OSE) August rubber contract closed 3.71% higher at 349.7 yen ($2.35) per kg, though it remained largely unchanged for the week. Similarly, the Shanghai Futures Exchange (SHFE) May rubber contract inched up 0.23% to 17,180 yuan ($2,374.04) per ton, reflecting modest gains in the sector.
Supply-side concerns were fueled by seasonal production slowdowns in Thailand, a major rubber producer. The country is currently in its low-yield season (February-May), before harvesting peaks from June to September. Further supply disruptions are expected next week as stronger winds and heavy rainfall hit Thailand’s southern regions, according to the local meteorological agency.
Despite these supply constraints, wider market sentiment remained bearish, partly due to fears of retaliatory tariffs targeting Tesla ($TSLA) and other major U.S. exporters. The potential for new trade barriers has raised concerns about global automobile sales and production, which directly influence rubber demand for tires.
Looking ahead, investors will monitor China’s upcoming policy announcements, which could boost consumption and provide further support to rubber prices. However, trade tensions and auto sector weakness remain key risk factors that could limit upside potential in the near term.
The Osaka Exchange (OSE) August rubber contract closed 3.71% higher at 349.7 yen ($2.35) per kg, though it remained largely unchanged for the week. Similarly, the Shanghai Futures Exchange (SHFE) May rubber contract inched up 0.23% to 17,180 yuan ($2,374.04) per ton, reflecting modest gains in the sector.
Supply-side concerns were fueled by seasonal production slowdowns in Thailand, a major rubber producer. The country is currently in its low-yield season (February-May), before harvesting peaks from June to September. Further supply disruptions are expected next week as stronger winds and heavy rainfall hit Thailand’s southern regions, according to the local meteorological agency.
Despite these supply constraints, wider market sentiment remained bearish, partly due to fears of retaliatory tariffs targeting Tesla ($TSLA) and other major U.S. exporters. The potential for new trade barriers has raised concerns about global automobile sales and production, which directly influence rubber demand for tires.
Looking ahead, investors will monitor China’s upcoming policy announcements, which could boost consumption and provide further support to rubber prices. However, trade tensions and auto sector weakness remain key risk factors that could limit upside potential in the near term.