Both Shanghai and Japanese rubber futures dropped by more than 1%, as Thailand's peak production season creates supply pressure, and oil price volatility increases market caution.

(1) Japanese rubber futures ended a three-day winning streak on Thursday, with Osaka Exchange December delivery contracts closing down about 1.1% at 427.1 yen per kilogram, and Shanghai Futures Exchange's September natural rubber contracts also falling about 1.1%. (2) The main producing country, Thailand, has entered the peak production season. Output in the southern regions has started to gradually recover due to reduced rainfall from late June to early July. Natural rubber usually experiences a low production period from February to May and then enters a harvesting peak that lasts until September. (3) The CEO of a rubber data analysis agency stated that the market remains vigilant regarding oil price fluctuations linked to the situation in the Strait of Hormuz, but strong raw material costs provide bottom-line support for rubber prices, limiting further downside. (4) Crude oil futures fell on Thursday due to profit-taking, while a new round of U.S. strikes on Iranian military facilities raised market concerns about escalating conflict and supply disruptions. Natural rubber is often guided by oil prices because it competes with crude-oil-based synthetic rubber for market share.