Rubber Futures Plummet as Demand Weakens in Key Markets

Japanese rubber futures continued their downward trend, closing at a seven-week low in Singapore on Thursday. The decline marked the third consecutive session of losses, with the Osaka Exchange (OSE) rubber contract for October delivery falling to 302.1 yen per kg, the lowest level since March 8. This drop was in line with Shanghai's losses, driven by reduced demand prospects and a slowdown in tyre production in China ahead of a long holiday.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery also experienced a decline, closing at 14,045 yuan per metric ton. The market sentiment was influenced by 'abnormally weak demand from China and concerns over demand prospects from the U.S.,' according to industry experts.

Chinese tyre manufacturers scaled back production in preparation for the upcoming May Day holidays, contributing to the overall decrease in demand. Additionally, a slowdown in U.S. business activity in April and delays in Toyota Motor's electric vehicle production further impacted market dynamics.

In Southeast Asia, Thailand's car production witnessed a significant decline of 23.08% in March compared to the previous year, reflecting broader challenges in the automotive sector.

Overall, the front-month rubber contract on Singapore Exchange's SICOM platform for May delivery closed at 158.8 U.S. cents per kg, down 1% from the previous trading session.