SINGAPORE: Japanese rubber futures rebounded on Friday, ending the week higher as prospects of weaker supply from Asian producers outweighed concerns of global trade tensions. The Osaka Exchange (OSE) rubber contract for July delivery closed up 9.9 yen, or 2.7%, at 376.6 yen ($2.47) per kg.
The contract edged higher by 0.78% for the week. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery rose 190 yuan, or 1.07%, to 17,935 yuan ($2,466.07) per metric ton, logging a rise of 1.97% this week.
Total supply of natural rubber has significantly shrunk as overseas production entered its off-peak season, Chinese commodities data provider Longzhong Information said in a note.
Meanwhile, downstream tyre factories have gradually resumed production, driving market expectations of higher demand due to inventory replenishment, Longzhong added. Farmers should prepare for crop damage from February 17-20 as a high-pressure monsoon strengthens with more rains over the Gulf and south of Thailand, the country’s meteorological department said on its website.
US President Donald Trump tasked his economics team with devising plans for reciprocal tariffs on every country taxing US imports, ramping up prospects for a global trade war with American friends and foes. China, the world’s top rubber consumer, is one of the trading partners targeted by Trump’s tariff directive.
Chinese producers are rushing to alternative export markets as they face weak demand at home and harsher conditions in the United States, where they sell more than $400 billion worth of goods annually.
The front-month rubber contract on the Singapore Exchange’s SICOM platform for March delivery last traded at 204.0 US cents per kg, up 2.7%.
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