May 28, 2025
Rubber India
Overview
On May 28, 2025, Japanese rubber futures experienced a decline due to concerns surrounding a prolonged price war in China’s automobile market. This situation has negatively impacted market sentiment for rubber, a key material used in tire manufacturing.
Market Performance
Osaka Exchange (OSE): The rubber contract for November delivery fell by 4.6 yen, or 1.41%, settling at 321.3 yen ($2.23) per kg.
Shanghai Futures Exchange (SHFE):
The September delivery rubber contract dropped by 340 yuan, or 2.36%, to 14,095 yuan ($1,957.42) per metric ton.
The June butadiene rubber contract decreased by 260 yuan, or 2.24%, to 11,325 yuan ($1,572.74) per ton.
Singapore Exchange (SICOM): The front-month rubber contract for June delivery last traded at 166.7 U.S. cents per kg, down 2.2%.
Factors Influencing the Market
Price War in China: The ongoing price war in China’s auto industry, particularly following significant discounts offered by electric vehicle manufacturer BYD, has raised fears of a shake-out in the market. This has led to concerns about the financial health of various automakers and their suppliers, which could further impact rubber demand.
Supply Dynamics: As overseas tapping of rubber begins, the supply of raw materials is expected to increase, which may put additional pressure on prices. Typically, rubber production experiences a low period from February to May, followed by a peak harvesting season that lasts until September.
Currency Impact: The Japanese yen has weakened, trading at 144.345 per dollar, which could make yen-denominated assets more attractive to overseas buyers. This currency fluctuation may influence the overall market dynamics for rubber and other commodities.
Conclusion
The natural rubber market is currently facing downward pressure due to fears stemming from the automotive sector’s pricing strategies in China. As the market adjusts to these developments, stakeholders will need to monitor both supply trends and currency fluctuations closely.
