Japanese rubber futures slip on firmer supply prospects, soft China

SINGAPORE: Japanese rubber futures eased on Tuesday on a firmer supply outlook amid seasonal harvesting, while muted Chinese economic data also pressured prices.

The Osaka Exchange (OSE) rubber contract for October delivery was down 1.2 yen, or 0.37%, at 323.3 yen ($2.24) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery dipped 15 yuan, or 0.1%, to 14,940 yuan ($2,068.74) per metric ton.

The most active June butadiene rubber contract on the SHFE fell 185 yuan, or 1.51%, to 12,070 yuan ($1,671.33) per metric ton. The prompt reversal in prices could indicate that the overall demand is weak, and uncertainty still remains amidst tariffs and as more supply comes on post-wintering, said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies.

Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September. Still, excessive rainfall in overseas production areas interfered with the start of tapping, said broker Everbright Futures.

Thailand’s meteorological agency warned of heavy rains and accumulations that could lead to flash floods, with the southwest monsoon strengthening from May 22-26. * Sentiment was also hit by slowing growth in China’s factory output and retail sales numbers that missed expectations.

Meanwhile, Japan’s Nikkei share average climbed on Tuesday, supported by a pause in the yen’s rally that lifted automakers and other export-oriented stocks. Toyota added 1.2% and Mazda jumped 5%.

The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 172.5 US cents per kg, down 0.2%.