Japanese rubber futures rally on tightening supply

The Osaka Exchange (OSE) rubber contract for August delivery was up 5.4 yen, or 1.46percent, at 374.2 yen (USD2.40) per kg, its highest since February 21, 2025.

The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery rose by 355 yuan, or 2.1percent, to 17,240 yuan (USD2,510.16) per metric ton. The most active March butadiene rubber contract on the SHFE shed 5 yuan, or 0.04percent, to 13,045 yuan per metric ton. The prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber have risen sharply since the start of February, amid tighter supply ahead of the wintering season. Rubber crops usually experience a low-production season from February to May, followed by a peak harvesting period that lasts until September.

Top producers Thailand and Indonesia have also experienced increased localised rainfall, according to the countries’ respective meteorological agencies.

The weather disruptions have led to lower raw material output than in the same period last year, supporting rubber prices, a note from Chinese financial information site Tonghuashun said.

Oil prices were hovering near seven-month highs as the threat of military conflict between the US and Iran, which could disrupt supply, continues to worry investors, even as talks between the parties are set for Thursday.

The front-month rubber contract on the Singapore Exchange’s SICOM platform for March delivery last traded at 203 US cents per kg, up 1.8percent as of 0700 GMT.