(June 20, 2025)
Rubber India
Market Overview:
On June 20, 2025, Japanese rubber futures experienced a slight decline due to weaker demand from the tire industry in China, the largest consumer of rubber. Despite this dip, the contracts are poised for weekly gains, driven by supply concerns linked to wet weather.
Key Price Movements:
Osaka Exchange (OSE):
The November rubber contract fell by 1.2 yen (0.4%) to 297.1 yen ($2.04) per kg.
Despite the drop, the contract has increased by 1.68% over the week.
Shanghai Futures Exchange (SHFE):
The September rubber contract decreased by 30 yuan (0.21%) to 13,980 yuan ($1,946.91) per metric ton.
The most active July butadiene rubber contract fell by 35 yuan (0.3%) to 11,700 yuan ($1,629.39) per metric ton.
Singapore Exchange (SICOM):
The front-month July rubber contract last traded at 162.9 U.S. cents per kg, down 0.5%.
Supply Concerns:
Rainfall in key rubber-producing regions is affecting the tapping process, leading to a shortage of raw materials.
Longzhong Information, a Chinese commodities data provider, highlighted that adverse weather is disrupting overall output.
Chinese authorities have issued warnings about flash floods in various regions, which could further impact production.
Thailand’s meteorological agency has also cautioned about potential rainfall causing flash floods from June 21-25, prompting farmers to prepare for possible crop damage.
Demand Factors:
The tire industry is experiencing poor consumption levels as demand enters the off-season, which is putting downward pressure on prices.
According to Tonghuashun Information, the current demand is lower than expected, impacting market stability.
Currency Impact:
The U.S. dollar has strengthened by 0.2% against the yen, now at 145.56 yen per dollar.
A stronger dollar makes yen-denominated assets more affordable for overseas buyers, potentially influencing demand in the international market.
Conclusion:
The natural rubber market is currently facing challenges due to weak demand from the tire industry and supply disruptions caused by adverse weather conditions. While prices have dipped today, the overall weekly gains suggest that supply concerns may continue to play a significant role in shaping market dynamics in the near future. Traders and stakeholders should monitor weather patterns and demand trends closely.
