Rubber futures weakened across Asia this week, as higher production costs and waning auto sector demand squeezed both producers and buyers.
What does this mean?
Japanese rubber futures for February delivery dipped 0.47% to 317.5 yen ($2.15) per kilo on the Osaka Exchange, racking up a weekly loss of over 2%. Shanghai’s main contract fell too, with both natural and synthetic rubber prices heading lower as margins get pinched—input costs keep climbing while processed rubber prices slide. Buyers are holding back, watching for a steadier spot market, according to Helixtap Technologies. Oil oversupply is dulling synthetic rubber’s price edge, and softer global electric vehicle sales—up just 15% in August, and a muted 6% in China—aren’t helping demand. Add in seasonal weather risks threatening output in top producer Thailand, and rubber markets are left in limbo.
For markets: Car sales still dictate the pace.
Rubber’s fate closely tracks global car and tire demand. China’s EV boom, which once fueled rubber consumption with blockbuster growth, cooled to just 6% in August. With the world’s biggest auto market slowing, Asian rubber contracts like Singapore’s SICOM fell 1% to 172.1 US cents per kg, signaling a shifting landscape for suppliers and investors alike.
The bigger picture: Supply chain headwinds keep mounting.
Higher input costs and cautious buyers have set up a tough stretch for the rubber industry. Currency swings—such as the yen at 147.45 per dollar and the yuan at 7.1209—muddy pricing even more, while Thailand’s weather risks loom large for global supply. That volatility matters for everyone, from automakers to logistics firms, with far-reaching impacts on costs and supply chain stability.
Source: finimize