Japanese rubber futures edged lower on Monday, pressured by waning tyre demand and broader global concerns affecting raw materials. The Osaka Exchange (OSE) rubber contract for December delivery dropped 0.8 yen, or 0.25%, to 316.5 yen ($2.15) per kg.
The bearish trend echoed across regional markets. Shanghai Futures Exchange’s (SHFE) September rubber contract fell by 115 yuan or 0.8% to 14,270 yuan ($1,990.21) per metric ton. The August butadiene rubber contract—a key synthetic rubber—also declined by 35 yuan to 11,570 yuan.
Investor sentiment was further impacted by news that Orion, the world’s largest carbon black supplier, plans to shut down three to five production lines globally by the end of 2025. The move comes amid poor performance in its tyre-related business. Carbon black, a crucial raw material in tyre manufacturing, has seen declining demand in recent quarters, noted broker Galaxy Futures.
A stronger yen—up 0.1% to 147.27 per dollar—made Japanese exports, including rubber, relatively costlier for overseas buyers, adding pressure to local prices. Japan’s Nikkei index also dipped 0.5% as investor caution remained high due to continued U.S. tariff threats.
Severe weather alerts in Thailand, the world’s top rubber producer, are also in focus. The Thai Meteorological Department warned of heavy rainfall and flash flooding between July 13–15 and again around July 19, potentially disrupting production and logistics.
Despite these challenges, supportive factors remain. Rising oil prices and possible economic stimulus in China are offering some cushion to rubber markets, as synthetic rubber—derived from crude oil—often competes directly with natural rubber.
On the Singapore Exchange (SICOM), the front-month August rubber contract last traded at 164.7 U.S. cents per kg, down 0.5%.
With global supply chain shifts, weak tyre consumption, and a mixed macroeconomic environment, rubber prices are expected to remain volatile in the short term.
