SINGAPORE: Japanese rubber futures posted a sixth consecutive weekly loss on Friday, as expectations of growing supply overshadowed the potential for easing trade tensions between the U.S. and China, the world’s largest consumer of rubber.
The October rubber contract on the Osaka Exchange (OSE) closed down 0.7 yen, or 0.24%, at 289.3 yen ($2.02) per kilogram, marking a 0.55% decline for the week. Meanwhile, the September rubber contract on the Shanghai Futures Exchange (SHFE) rose by 120 yuan, or 0.82%, to 14,720 yuan ($2,020.48) per metric ton.
The most active May butadiene rubber contract on the SHFE also saw gains, climbing by 175 yuan, or 1.57%, to 11,335 yuan ($1,555.85) per metric ton.
Market sentiment was bolstered by increasing momentum in rubber harvesting in key domestic production areas, fueling optimism for a rise in supply. Rubber crops typically experience a low-production phase from February to May, before entering a peak harvest season that lasts through September, according to Chinese financial platform Tonghuashun Information.
Although supply concerns weighed on prices, news of potential de-escalation in the U.S.-China trade dispute provided some support for the broader commodity markets. U.S. President Donald Trump confirmed ongoing trade negotiations with China, which eased concerns over further tariff hikes. China is reportedly considering exemptions for certain U.S. imports from its 125% tariffs, a move that could help ease trade tensions.
Despite the lack of concrete progress in trade talks, Chinese stocks rose on Friday in response to the positive trade news.
Meanwhile, the U.S. dollar strengthened 0.7% to 143.665 yen, making yen-denominated assets more affordable for overseas buyers. On the Singapore Exchange’s SICOM platform, the front-month rubber contract for May delivery traded at 168.1 U.S. cents per kilogram, down 0.7%.
