SHANGHAI: Japanese rubber futures edged lower on Friday, tracking a broad-based decline in Asian equities, but logged a weekly gain on high oil prices and tight natural rubber supply.
The Osaka Exchange rubber contract for August delivery was down 2.8 yen, or 0.74percent, at 374 yen (USD2.35) per kg on Friday. The contract has gained 1.48percent this week.
The rubber contract on Shanghai Futures Exchange (SHFE) for May delivery fell 430 yuan, or 2.5percent, to 16,765 yuan (USD2,434.19) per metric ton on Friday.
The most active April butadiene rubber contract on the SHFE shed 15 yuan, or 0.1percent, to 15,725 yuan per metric ton. Japan’s Nikkei slid with other Asian stocks as the escalating Middle East conflict drove crude oil prices higher, heightening inflation concerns and prompting investors to dump riskier assets.
Japan’s second-largest automaker Honda will fall to its first annual loss in almost 70 years as a listed company, as weaker-than-expected demand for electric vehicles hammered its bottom line.
Meanwhile, the yen provided some support to the Japanese rubber contract as it slid to 159.69 per dollar, the weakest since July 2024. A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers.
Elsewhere, portside butadiene rubber stocks in China declined by 8,100 tons week-on-week, while trader and factory inventories rose, according to a report by Chinese commodity data provider Longzhong Information.
Butadiene rubber supply is expected to tighten due to disruption in feedstock supplies from the Middle East, causing Asian refiners to cut runs and declare force majeure.
Chinese butadiene rubber factories are still running at high rates, with demand for butadiene rubber products expected to be robust, the report said, adding that higher prices would make it increasingly unsustainable for these factories to operate.
Front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 195.7 US cents per kg, down 1.2percent as of 0702 GMT.
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