Japanese rubber futures saw modest gains on Thursday, driven by supply disruptions and strong demand in China’s automotive sector. However, escalating US-China trade tensions and a stronger yen limited the upward momentum.
The Osaka Exchange (OSE) rubber contract for July delivery finished the day 0.4 yen higher, or 0.11%, at 374.5 yen ($2.45) per kilogram. Similarly, the Shanghai Futures Exchange (SHFE) rubber contract for May delivery climbed by 205 yuan, or 1.2%, to 17,290 yuan ($2,373.60) per metric ton. The February butadiene rubber contract on the SHFE also advanced, gaining 95 yuan, or 0.65%, to 14,635 yuan ($2,009.12) per metric ton.
Weather patterns in Thailand, the world’s largest rubber producer, are expected to contribute to tighter supply. According to the country’s meteorological agency, the northeast monsoon will strengthen from February 8 to February 10, bringing isolated thunderstorms to the southern region, which could disrupt rubber harvesting.
In China, automotive production and sales reached new heights in 2024, with significant growth in exports, according to a report from consultancy Hexun Futures, citing data from the China Association of Automobile Manufacturers (CAAM). The surge in automobile production is expected to further drive rubber demand, as the industry remains heavily reliant on rubber for tire manufacturing.
Meanwhile, markets in China and Hong Kong saw gains, particularly in the technology sector, following a breakthrough by Chinese AI startup DeepSeek. However, the yen’s appreciation, which reached an eight-week high of 151.81 per dollar, tempered the bullish sentiment in commodity markets.
