Rubber Futures Surge Amid Supply Concerns: Flooding Impacts Asia
Published: 1 July 2025
Keywords: Natural Rubber, Rubber Futures, Supply Concerns, Flooding, Asia, China, Thailand, Vietnam, Philippines, Commodity Prices, Global Trade, Raw Materials
Tokyo, Japan – Natural rubber futures experienced a
significant climb, reaching a three-week high last week, driven by growing
concerns over supply disruptions across key rubber-producing regions in Asia,
according to a report by the Japan Exchange Group (JPX).
The week ending 27 June saw a firm upward trend in rubber prices across all
major exchanges. The JPX attributed this surge to “a combination of short
covering and light, fresh speculative buying,” indicating a shift in market
sentiment.
Driving this improved sentiment were widespread reports of severe weather
events. Heavy rainfall and subsequent flooding have been reported in
southwestern China, particularly affecting the provinces of Guangxi,
Chongqing, and Guangzhou. Local authorities have tragically confirmed
fatalities and the evacuation of over 80,000 residents in these areas. These
events have raised significant concerns about potential disruptions to rubber
tapping and processing in the region.
Furthermore, the southwest monsoon has brought substantial rainfall to
northern Thailand, Vietnam, and the Philippines. These weather conditions
have further exacerbated concerns regarding the stability and availability
of natural rubber supply from these crucial producing nations.
Market reactions across Asia reflected these supply worries:
-
In Osaka, Japan, the OSE November 2025 contract showed a
strong upward movement, closing 5.6% higher week-on-week. Trading was
generally quiet but supported by positive trends in regional markets and
local short covering activities. -
Shanghai rubber futures for September delivery, traded on the
OSE, also saw an increase of 1.0% week-on-week, as reported by JPX data. -
In China, both SHFE (Shanghai Futures Exchange) and INE
(International Energy Exchange) rubber prices experienced gains of 1.0% and
0.9%, respectively, highlighting the domestic market’s sensitivity to the
flooding situation. -
In Singapore, SICOM’s active September 2025 contract
closed 1.3% higher week-on-week, with moderate trading volumes. The price
increase was attributed by JPX to short covering and positive market
momentum originating from China.
The recent surge in rubber futures underscores the market’s sensitivity to
potential supply disruptions caused by adverse weather conditions in key
natural rubber-producing regions. Businesses relying on natural rubber, such
as international tire manufacturers like Finixx, should closely monitor these
developments and their potential impact on raw material costs and global
trade dynamics.