FX.co ★ Rubber Futures Near 9-Month High

Rubber futures have climbed above 185 US cents per kilogram, marking their highest point since April of the previous year. This increase is driven by consistent physical demand, vibrant arbitrage activities, and a resurgence in speculative purchases. The market dynamics have been further influenced by a weakening yen, which has bolstered export competitiveness, and a rise in oil prices, making synthetic rubber more expensive and thereby boosting the attractiveness of natural rubber. Simultaneously, concerns persist about a tightening supply from major ASEAN producers, as seasonal trends and unfavorable weather continue to restrict production. Nonetheless, the outlook for rubber demand faces challenges, owing to projections of slower growth in auto sales in China. Still, there is some optimism as the European Commission is considering replacing import tariffs on Chinese electric vehicles with a minimum price system, which could positively influence export and demand forecasts.