Today, Japanese rubber futures experienced a decline for the second consecutive session, primarily influenced by disappointing economic data from China, which raised concerns about demand from the world’s largest consumer of rubber.
Market Performance
Osaka May rubber ) fell by 3.6 yen, or 0.97%, settling at 367.4 yen ($2.39) per kg .
SHFE May rubber decreased by 470 yuan, or 2.55%, to 17,950 yuan ($2,464.51) per metric ton.
The February butadiene rubber contract (SHBRv1) also saw a decline, slipping 80 yuan, or 0.59%, to 13,480 yuan ($1,850.78) per metric ton .
January rubber on the SICOM last traded at 193.3 U.S. cents per kg, down 2.0% .
Economic Context
Recent official data from China indicated unexpected weakness in consumption, which poses risks to economic growth amid ongoing tariff threats from the U.S. This has led to concerns that China’s policy measures aimed at stimulating growth have not yet yielded significant results. Chinese leaders have agreed to increase the budget deficit to 4% of GDP for the upcoming year, the highest on record, while maintaining a growth target of around 5% .
Supply and Demand Factors
Tyre Demand: There has been a noted decrease in winter demand for tyres, prompting tyre manufacturers to lower their operating rates. Additionally, natural rubber inventories in Qingdao have seen a slight increase, further indicating a supply surplus .
Weather Impact: The Thai meteorological agency reported that the monsoon in Thailand’s Gulf and southern regions is expected to weaken, which may affect rubber production in the world’s largest rubber-producing country.
Currency Influence
The U.S. dollar was up 0.12% against the yen, trading at 153.65 yen. A weaker yen typically makes yen-denominated assets more attractive to foreign buyers, which can influence market dynamics.
Outlook
The Japanese rubber market is currently facing downward pressure due to weak economic indicators from China and reduced demand in the tyre sector. Market participants are closely monitoring these developments, alongside currency fluctuations and weather conditions in major rubber-producing region
India
In the Indian market, the price of fourth-grade rubber sheets is currently around ₹191 per kg. The Indian rubber market is currently navigating uncertainty due to external economic factors, production challenges, and fluctuating international prices. Traders are advised to stay informed and agile as conditions evolve, particularly concerning demand from China and the impact of weather on local production.
Rubber India
