SINGAPORE: Japanese rubber futures ended daytime trade higher on Monday, driven by Thailand weather concerns and expectations of stimulus in China, although gains were limited by a sluggish outlook for tyre demand.
The Osaka Exchange (OSE) rubber contract for December delivery gained 0.4 yen, or 0.13%, to 317.7 yen ($2.16) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 25 yuan, or 0.17%, to 14,360 yuan ($2,003.12) per metric ton. The most active August butadiene rubber contract on the SHFE rose 20 yuan, or 0.17%, to 11,625 yuan ($1,621.61) per metric ton.
Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from July 19-20. In addition to severe weather conditions, higher crude oil prices and expectations of potential new economic stimulus measures in China also provided support to rubber markets, Japan Exchange Group said.
However, Orion, the world’s leading carbon black supplier, announced plans to shut down three to five global production lines by the end of 2025, said broker Galaxy Futures. This comes as Orion’s carbon black business for tyres saw weak recent quarters, Galaxy added. Carbon black is a critical material used in tyre manufacturing.
Elsewhere, the yen firmed to 147.31 per dollar, making yen-denominated assets less affordable to overseas buyers. Oil prices edged higher as investors monitored US sanctions on Russia that may impact global supply. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on the Singapore Exchange’s SICOM platform for August delivery last traded at 165 US cents per kg, down 0.4%.
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