Rubber futures end six-day losing streak with a rebound as heavy rains in Thailand and rising oil prices drive gains

⑴ Japanese rubber futures rebounded on Monday, ending six consecutive trading days of decline. The main contract closed up about 2% to around 436 yen per kilogram, supported by both rising oil prices and concerns over supply from Thailand. ⑵ The main contract of natural rubber on the Shanghai Futures Exchange also rose about 2.2% to 19,180 yuan per ton, while the butadiene rubber contract surged around 4.6% to reach the highest level since mid-May. The sharp increase in synthetic rubber prices has further reinforced the logic for substituting natural rubber. ⑶ The Thai meteorological department has warned of heavy rainfall and flash floods from September 6 to 12. Continued rain disrupts latex harvesting in major production areas, raising expectations of tighter raw material supply. The probability of El Niño peaking between September and November is increasing, further exacerbating the risk of reduced production. ⑷ Mutual attacks between the US and Iran in the Strait of Hormuz and surrounding waters have pushed crude oil prices up by more than $1 per barrel. Since natural rubber competes with synthetic rubber in the market, rising oil prices have provided an additional boost. ⑸ According to analysts at Guoyuan Futures, the narrowing price gap between synthetic and natural rubber has prompted some downstream companies to increase the proportion of natural rubber used. Marginal demand is now being released, with the near-month contract on Singapore's SICOM rising about 3% simultaneously.