Rubber futures in retreat as supply concerns ease

Tokyo – Natural rubber futures lost ground for a second week in a row – ending a five-week rally driven by positive economic indicators and concerns about supply.

Pricing on all major Far East markets closed the trading week ended 21 June lower than prior-week levels, the latest data from Japan Exchange Group (JPX) shows.

Producing countries reached full production capacity and “recent speculative fund buying dried up,” explained the Tokyo group's trading review.

Furthermore, concerns about the Chinese economy increased particularly due to challenges impacting the country's property sector, noted the report issued 24 June.

China’s economic and property-market woes, reported JPX, have led to “strong selling” in commodities such as copper and rubber.

In Osaka, Japan, OSE rubber futures pricing dropped by 3.2% week-on-week amid light trading volumes over the last full trading week.

Meanwhile, rubber futures decreased by 2.2% on both China's SHFE and INE exchanges: accompanied by a “sharp decline” in trading volume due to position closures.

In Singapore, SICOM rubber futures fell by 1.1% week-on-week, driven by “large position adjustments,” JPX further noted.

In related news, China's end-of-May vehicle sales increased marginally by 57,968 units compared to the month before, reaching a total of 2,416,803 units.

The country's unemployment rate in May remained unchanged at 5.0% but industrial production for the month came in lower than expected at 5.6%, noted JPX.

In other global news, Nissan has shut down its car production plant in Changzhou, Jiangsu province, China, due to “a slump in sales and increased competition.”

In the US, Ford Motor CEO Jim Farley announced a six-week delay in new vehicle designs to address issues with recall vehicles, JPX also observed.