Japanese rubber futures dipped on Tuesday, ending a five-day winning streak, as rainfall eased in top producer Thailand, allowing rubber tapping activity to normalize. Simultaneously, uncertainties surrounding China’s electric vehicle (EV) market dampened investor sentiment.
The Osaka Exchange (OSE) rubber contract for December delivery fell by 0.22%, settling at 317 yen ($2.15) per kg during daytime trading. In contrast, the Shanghai Futures Exchange (SHFE) rubber contract for September delivery gained 0.63% to close at 14,395 yuan ($2,006.50) per metric ton.
Butadiene rubber, a synthetic alternative used in tire manufacturing, saw a marginal decline. The most active SHFE contract for August dipped by 0.43% to 11,535 yuan ($1,607.84) per metric ton.
Weather Normalizes in Thailand
Thailand’s meteorological agency had earlier forecasted heavy rains and flash flood risks between July 19–21, but seasonal weakening of rains has returned rubber tapping operations to normal levels. Historically, rubber crops experience low yields from February to May, followed by peak harvesting between June and September.
EV Demand and Rubber Market Link
China, the world’s largest EV market, reported a 28% YoY surge in electric vehicle sales during June, reaching 1.11 million units. However, concerns linger over subsidy exhaustion in some Chinese cities, potentially leading to a slowdown in EV sales, which directly affects automobile production and demand for rubber-made tires.
Oil Prices and Rubber Correlation
Natural rubber prices often correlate with crude oil, given that synthetic rubber is a petroleum-based product. On Tuesday, oil prices dropped due to President Donald Trump’s extended deadline for Russia to end the war in Ukraine, easing supply concerns.
On the Singapore Exchange’s SICOM platform, the front-month August rubber contract rose slightly by 0.5% to 166 U.S. cents per kg.
