Japan rubber futures rise as trade optimism offsets supply pressures
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Japanese rubber futures advanced on Wednesday, buoyed by renewed optimism over U.S.–China trade relations, which helped counterbalance concerns about increasing supply in the months ahead. The Osaka Exchange (OSE) September rubber contract (TRB1!) closed up 4.6 yen, or 1.61%, at 289.9 yen per kilogram ($2.05), marking a solid recovery from recent lows.
The positive sentiment was reinforced by comments from U.S. Treasury Secretary Scott Bessent, who expressed confidence that tensions between Washington and Beijing would ease, even though formal negotiations have yet to begin. President Donald Trump echoed this tone, telling reporters he expects a constructive dialogue and that tariffs on Chinese imports will drop “significantly” once a deal is reached. This shift in rhetoric has lifted broader commodity sentiment, with China being the world’s largest consumer of natural rubber.
Chinese rubber contracts mirrored the upward move. The Shanghai Futures Exchange September rubber contract (RSS31!) rose 80 yuan, or 0.55%, to 14,695 yuan per metric ton ($2,014.37), while the May butadiene rubber contract surged nearly 3% to 11,295 yuan ($1,548.30), reflecting strong momentum across the synthetic rubber complex.
Crude oil prices also lent support, rising more than 1% on the day amid fresh sanctions on Iran and a reported drop in U.S. crude inventories. As natural rubber competes with synthetic rubber—derived from petroleum—higher oil prices tend to improve the competitiveness of natural rubber, strengthening demand.
On the supply front, production areas in China’s Yunnan province are entering their seasonal peak, and harvesting in overseas plantations is expected to ramp up soon. Despite the looming increase in supply, weather conditions may temper the pace. Thailand's meteorological agency issued warnings for heavy rainfall in southern regions—a key production zone—between April 23 and 25, potentially disrupting tapping activity.
Elsewhere, the front-month contract on the Singapore Exchange’s SICOM platform (TF1!) for May delivery rose 0.5% to 167.8 U.S. cents per kilogram, tracking the regional rebound.
While fundamentals point to an imminent rise in output, sentiment is currently driven by geopolitical developments and macro conditions. As trade tensions show signs of easing and oil prices climb, near-term rubber futures may continue to find support. However, with peak production season approaching, traders will need to closely monitor supply-side dynamics and weather developments in major producing regions.
The positive sentiment was reinforced by comments from U.S. Treasury Secretary Scott Bessent, who expressed confidence that tensions between Washington and Beijing would ease, even though formal negotiations have yet to begin. President Donald Trump echoed this tone, telling reporters he expects a constructive dialogue and that tariffs on Chinese imports will drop “significantly” once a deal is reached. This shift in rhetoric has lifted broader commodity sentiment, with China being the world’s largest consumer of natural rubber.
Chinese rubber contracts mirrored the upward move. The Shanghai Futures Exchange September rubber contract (RSS31!) rose 80 yuan, or 0.55%, to 14,695 yuan per metric ton ($2,014.37), while the May butadiene rubber contract surged nearly 3% to 11,295 yuan ($1,548.30), reflecting strong momentum across the synthetic rubber complex.
Crude oil prices also lent support, rising more than 1% on the day amid fresh sanctions on Iran and a reported drop in U.S. crude inventories. As natural rubber competes with synthetic rubber—derived from petroleum—higher oil prices tend to improve the competitiveness of natural rubber, strengthening demand.
On the supply front, production areas in China’s Yunnan province are entering their seasonal peak, and harvesting in overseas plantations is expected to ramp up soon. Despite the looming increase in supply, weather conditions may temper the pace. Thailand's meteorological agency issued warnings for heavy rainfall in southern regions—a key production zone—between April 23 and 25, potentially disrupting tapping activity.
Elsewhere, the front-month contract on the Singapore Exchange’s SICOM platform (TF1!) for May delivery rose 0.5% to 167.8 U.S. cents per kilogram, tracking the regional rebound.
While fundamentals point to an imminent rise in output, sentiment is currently driven by geopolitical developments and macro conditions. As trade tensions show signs of easing and oil prices climb, near-term rubber futures may continue to find support. However, with peak production season approaching, traders will need to closely monitor supply-side dynamics and weather developments in major producing regions.