SHANGHAI: Japanese rubber futures rose on Tuesday, as oil prices jumped to a four-week high on renewed US-Iran tensions, while tightening supplies in Southeast Asia also lent support.
The Osaka Exchange (OSE) rubber contract for December delivery gained 6.6 yen, or 1.57 percent, to 427.6 yen (USD2.63) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 150 yuan, or 0.89percent, to 17,065 yuan (USD2,516.92) per metric ton.
The most-active September butadiene rubber contract on the SHFE climbed 510 yuan, or 3.96percent, to 13,390 yuan per ton, rising for the eighth straight session. The rally was mainly driven by gains in oil prices, which have lifted butadiene rubber, a synthetic substitute made from crude, said a Singapore-based trader.
Oil prices rose nearly 3percent to their highest in four weeks, as the US reimposed its naval blockade of Iran while the two countries stepped up attacks in the Strait of Hormuz, heightening uncertainty about energy flows.
Natural rubber often tracks oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Malaysia’s natural rubber output fell 16.7percent year-on-year to 20,198 tons in May, while inventories dropped 6.2percent month-on-month to 122,658 tons, data from Malaysia’s Department of Statistics showed on Monday. Top rubber producer Thailand’s meteorological agency warned of severe rains and flash floods from July 13 to 15, which could affect tapping activity in key areas.
Rubber crops usually experience a season of low production from February to May, followed by a peak harvesting period that lasts until September.
The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 217.3 US cents per kg, up 1.3percent as of 0700 GMT.
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