June 13, 2025
Rubber India
Overview
Today, the natural rubber market is experiencing upward movement due to rising oil prices following Israel’s military strikes on Iran. This geopolitical event has led to increased volatility in Asian markets, impacting rubber futures.
Market Prices
Osaka Exchange (OSE):
November delivery rubber contract rose by 1%, reaching 293.7 yen per kg.
Shanghai Futures Exchange (SHFE):
September delivery rubber contract increased by 0.6%, priced at 13,860 yuan per metric ton.
July butadiene rubber contract climbed by 0.7% to 11,295 yuan per metric ton.
Singapore Exchange (SICOM):
Front-month rubber contract for July delivery is at 163 U.S. cents per kg, up 1.9%.
Oil Prices
Oil prices surged over 7%, hitting their highest levels in months. This increase is significant as natural rubber competes with synthetic rubber, which is derived from crude oil.
Asian Market Reactions
The Nikkei 225 index in Japan fell by 1.3% in early trading, reflecting broader market concerns linked to rising oil prices and geopolitical tensions.
Production and Supply Factors
The natural rubber production typically decreases from February to May, leading to a peak harvesting period from June to September. This seasonal pattern is crucial for understanding market dynamics.
Inventory Levels
In China, rubber inventories have slightly decreased but are still relatively high. As of June 8, 2025:
Total inventory in the Qingdao area stood at 605,500 tons, down by 4,100 tons (or 0.67%) compared to the previous reporting period.
High inventory levels can exert bearish pressure on natural rubber prices despite the current upward trend.
Economic Context
Recent developments in trade negotiations between China and the United States have contributed to a more favorable macroeconomic outlook, positively influencing the Shanghai rubber market.
Conclusion
The natural rubber market is currently benefiting from rising oil prices and geopolitical events, with prices on various exchanges showing solid gains. However, high inventory levels in China and seasonal production trends could present challenges in sustaining this upward momentum.
Investors and stakeholders should monitor both geopolitical developments and market inventory levels closely as the situation evolves.
