Japanese rubber futures saw a strong finish on Friday, supported by a tighter supply outlook and optimism surrounding potential Chinese stimulus. However, the overall price trend remained flat for the week as traders weighed the impact of growing tariff concerns.
Osaka Exchange Sees Modest Gains
The August rubber contract on the Osaka Exchange (OSE) closed up 12.5 yen, or 3.71%, at 349.7 yen ($2.35) per kg. Despite this rise, the contract ended the week unchanged as traders balanced supply worries with tariff developments.
Shanghai Futures Edge Higher
The May rubber contract on the Shanghai Futures Exchange (SHFE) rose by 40 yuan, or 0.23%, to 17,180 yuan ($2,374.04) per metric ton. Meanwhile, the most active April butadiene rubber contract on the SHFE edged up by 5 yuan, or 0.04%, to 13,770 yuan ($1,902.83) per ton.
Chinese Stimulus Expectations Support Market
Chinese equities rose, particularly among consumer stocks, ahead of a press conference expected next week to announce additional measures aimed at boosting domestic consumption. This optimism helped to support rubber prices despite broader market concerns.
Tighter Supply from Thailand Drives Sentiment
Japanese rubber futures gained support from reports of tightening supply in Thailand, a key producer. According to Chinese financial data provider Tonghuashun Information, rubber crops in Thailand are entering a seasonal low production period from February to May, before reaching a peak in harvests from June to September.
Weather Concerns in Thailand Could Impact Supply
Weather forecasts indicate that from March 17-19, stronger winds and isolated heavy rains are expected in Thailand’s southern region, potentially disrupting rubber production.
Tariff Concerns Weigh on Market Sentiment
Despite the positive supply outlook, bearish sentiment in the equity markets continued to weigh on rubber prices. Broker Hexun Futures noted that concerns over U.S. tariffs and their potential impact on the automobile industry, a major consumer of rubber-made tires, added uncertainty to the market.
Tesla, a major U.S. automaker, recently warned that both it and other American exporters are vulnerable to retaliatory tariffs, which could be imposed due to former President Trump’s aggressive tariff policies.
SICOM Rubber Contracts Rise
On the Singapore Exchange’s SICOM platform, the front-month rubber contract for March delivery last traded at 196.3 U.S. cents per kg, up 0.7%.
Market Outlook
As traders continue to monitor global supply conditions and tariff developments, rubber prices are expected to remain volatile in the short term.
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