Japan rubber futures recoup early losses, higher supply concerns weigh on prices
- OSE rubber contract for January delivery was flat at 419.3 yen ($2.66) per kg
Japanese rubber futures recouped early losses to close flat on Wednesday, even as expectations of a seasonal rise in supply from global producers and weaker oil prices weighed on prices.
The Osaka Exchange (OSE) rubber contract for January delivery was flat at 419.3 yen ($2.66) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 155 yuan, or 0.93%, to 16,745 yuan ($2,481.77) per metric ton.
The most-active September butadiene rubber contract on the SHFE fell 25 yuan, or 0.2%, to 12,740 yuan per ton.
“Market observers are probably struggling to make sense of the fluctuations (in the rubber market),” said a Singapore-based trader, adding that the market may be marking time near a turning point as it awaits clearer signs of a peaceful resolution to the U.S.-Iran conflict.
A concentrated influx of new production in Southeast Asia’s peak tapping season is building inventory pressure at Chinese ports, analysts from broker Everbright Futures said in a note.
Global natural rubber output is projected to rise 2.3% to 15.31 million tons in 2026, the Association of Natural Rubber Producing Countries said in a report on Friday.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.3% from a week earlier, data showed on Friday.
Oil extended losses on Wednesday as investors waited to see if efforts to end the Iran war and restore traffic through the blockaded Strait of Hormuz were making progress.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 216.3 U.S. cents per kg, down 0.2% as of 0700 GMT.
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