SINGAPORE: Japanese rubber futures gained on Friday, buoyed by concerns over supply-side obstacles, although the contract for January delivery posted a weekly decline as a stronger yen and oil price movements weighed. The Osaka Exchange (OSE) rubber contract for January delivery closed up 4 yen, or 1.28%, at 315.3 yen ($2.11) per kg.
Still, the contract lost 0.76% this week. The January rubber contract on the Shanghai Futures Exchange (SHFE) rose 150 yuan, or 0.97%, to 15,680 yuan ($2,175.84) per metric ton. The clear uptrend in natural rubber futures today was largely driven by persistent supply disruptions, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.
Top producer Thailand’s meteorological agency warned of heavy to very heavy rains that may cause flash floods from August 2-5. Raw material prices remain firm and have been rising gradually, said a Singapore-based trader.
Additionally, the US Federal Reserve’s hint at a September rate cut has led to a weaker dollar and stronger local currencies, lending price support, the trader added. The safe-haven Japanese yen traded near multi-month highs against the dollar after an unexpected slump in US manufacturing fuelled fears of a downturn, sending stocks and bond yields tumbling.
The yen was steady at 149.49 per dollar, after strengthening as far as 148.51 overnight for the first time since mid-March. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Oil prices rose on Friday but were set for a fourth successive weekly decline, as signs of disappointing global fuel demand growth outweighed fears of supply disruptions. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
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