SINGAPORE: Japanese rubber futures ended higher on Friday, logging a weekly gain, buoyed by weather concerns in top producer Thailand. The Osaka Exchange (OSE) rubber contract for January delivery rose 2.3 yen, or 0.73%, to 319.5 yen ($2.17) per kg. It ended the week 0.66% higher. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery added 110 yuan, or 0.7%, to 15,905 yuan ($2,214.13) per metric ton.
The most active September butadiene rubber contract on the SHFE gained 40 yuan, or 0.34%, to 11,815 yuan per ton. Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from August 15-18. Meanwhile, oil prices climbed to fresh one-week highs after US President Donald Trump warned of “consequences” if Russia blocked a Ukraine peace deal, injecting concerns about supply. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Still, key rubber producing regions in Southeast Asia are gradually entering their peak production season in the second half of the year, in line with typical seasonal patterns, Chinese broker Hexun Futures said. “Strong continuity in shipping schedules is expected to support a continued increase in domestic imports.” Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September.
Meanwhile, the yen strengthened 0.4% to 147.125 following stronger-than-expected second-quarter GDP data. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
The front-month rubber contract on the Singapore Exchange’s SICOM platform for September delivery last traded at 171 US cents per kg, up 1.7%.
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