Global Rubber Prices Split Between Japan And China
Natural rubber markets move in opposite directions as weak demand, cautious buying, and shifting oil prices pull futures apart across Asia.
What’s going on here?
Rubber prices are moving in opposite directions across Asia, with Japanese futures slipping while Chinese and Singapore contracts edge higher. Traders are weighing soft demand, cautious buying, and oil prices that help set the tone for both natural and synthetic rubber.
What does this mean?
On Japan’s Osaka Exchange, the benchmark May rubber contract weakened as muted demand from tire makers and other end users kept buyers on the sidelines, limiting any near-term price support. In China, though, futures on the Shanghai Futures Exchange went the other way: the January natural rubber contract added 120 yuan (0.79%) to 15,360 yuan per metric ton, while the most-active January butadiene rubber contract – a key synthetic rubber – climbed 410 yuan (3.99%) to 10,685 yuan per ton. That strength points to livelier trading and some optimism around synthetic rubber, which is made from crude oil. The Association of Natural Rubber Producing Countries expects global natural rubber output to grow 1.3% in 2025, outpacing projected demand growth of 0.8% – a modest surplus that can keep a lid on prices. And with brokers like New Century Futures saying buyers are mostly purchasing just what they need, that thin demand could leave prices prone to sharp swings rather than a steady climb.
Why should I care?
For markets: A delicate tug of war between supply, demand, and oil.
Natural rubber is acting like a classic cyclical commodity: slightly faster production growth than demand, plus cautious buying further down the chain, is weighing on prices in Japan even as Chinese and Singapore contracts firm up. On SICOM in Singapore, the front-month January contract inched up 0.6% to 172.9 US cents per kilogram, hinting at support from regional buyers. Oil is another key swing factor: prices steadied as traders weighed Ukrainian drone attacks on Russian energy sites, US–Venezuela tensions, and mixed expectations for US fuel inventories. Because synthetic rubber is derived from crude, higher oil can make natural rubber relatively more appealing, tightening the link between energy markets and tire makers’ input costs. Currency moves matter too: the dollar ticked up 0.1% to 155.72 yen after strong demand for a 10-year Japanese government bond auction, and any fresh signs that the Bank of Japan might hike rates could complicate the export outlook for Japanese manufacturers that rely on rubber.
The bigger picture: Weather and rates keep a finely balanced market on edge.
Rubber’s longer-term balance hinges on a handful of producing countries, and Thailand – the world’s biggest supplier – is already flagging weather risks. Its meteorological agency warned of thundershowers and heavy rain from December 4 to 7, conditions that can disrupt tapping and transport and inject short-term volatility into prices. At the same time, a projected 1.3% rise in global output versus a 0.8% increase in demand in 2025 leaves only a slim buffer between surplus and shortage, making the market sensitive to shocks from weather, shipping, or geopolitics. Monetary policy adds another layer: a potential rate hike by the Bank of Japan and shifting US rate expectations influence currencies, trade flows, and financing costs for producers and processors. So the split between Japanese and Chinese rubber futures is less a contradiction and more a snapshot of local demand differences playing out against a tightly balanced global market.
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