SHANGHAI: Japanese rubber futures ended higher on Tuesday, extending gains to an eighth session on strong downstream demand.
The Osaka Exchange (OSE) rubber contract for June delivery was up 4.4 yen, or 1.29 percent, at 345.5 yen (USD2.21) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 70 yuan, or 0.44percent, to 15,670 yuan (USD2,241.55) per metric ton.
The most-active February butadiene rubber contract on the SHFE fell 55 yuan, or 0.47percent, to 11,565 yuan (USD1,654.34) per ton. Downstream demand for rubber has remained positive, while raw materials supply from major overseas producing countries was not smooth, said financial information site Tonghuashun. Chinese electric vehicle maker Leapmotor expects to sell more than 4 million vehicles a year within the next decade, on the back of rapid growth in sales volume and profitability throughout 2025.
Higher automobile demand exerts upward pressure on rubber tyre prices. Accumulating rubber inventories in China are pressuring Chinese rubber prices.
Inventory levels in imported rubber hub Qingdao are measured to be higher year-on-year, according to financial information site cngold. “With continued pressure on production and sales, as well as high tire inventories, companies will withhold production in the short term,” the site said.
Oil prices retreated after rising more than 2percent in the previous session. 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 January delivery last traded at 183.3 US cents per kg, up 0.1 percent, as of 0700 GMT.