Japanese rubber futures log weekly gain on US-China trade talk hopes

SINGAPORE: Japanese rubber futures climbed for a seventh consecutive session on Friday and posted weekly gains on hopes of easing trade tensions, ahead of the US-China trade talks, while higher oil prices also lent support.

The Osaka Exchange (OSE) October rubber contract closed up 0.6 yen, or 0.2%, at 301.2 yen ($2.07) per kg. The contract has risen 1.45% this week. The September rubber contract on the Shanghai Futures Exchange (SHFE) eased 75 yuan, or 0.51%, to 14,620 yuan ($2,017.86) per metric ton. The most active June butadiene rubber contract on the SHFE added 170 yuan, or 1.51%, to 11,450 yuan ($1,580.33) per metric ton.

US President Donald Trump said on Thursday that he expects substantive negotiations with China this weekend and that the 145% tariffs on Beijing would likely come down. Oil prices were up on Friday, after rising about 3% in the previous session, supported by the looming US-China trade talks.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Meanwhile, China’s exports rose faster than expected in April, while imports narrowed their declines, customs data showed.

However, Toyota Motor expects profit to decline by a fifth in the current financial year, weighed down by a weakness in the US dollar and the impact of Trump tariffs. Automobile sales could influence the intensity of vehicle manufacturing, which involves using rubber-made tyres. The front-month June rubber contract on the Singapore Exchange’s SICOM platform last traded at 171.4 US cents per kg, down 0.5%.