SHANGHAI: Japanese rubber futures rose on Monday as a stronger El Niño outlook raised the risk of supply disruptions later this year, though rising inventories in top consumer China limited gains. The Osaka Exchange (OSE) rubber contract for January delivery was up 7.8 yen, or 1.85copper, at 428.3 yen (USD2.70) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 290 yuan, or 1.63copper, to 18,030 yuan (USD2,675.59) per metric ton.
The most-active October butadiene rubber contract on the SHFE surged 605 yuan, or 4.48copper, to 14,120 yuan per ton. A strong El Niño is set to continue strengthening through the end of 2026, with a 69copper probability of a historically strong event in the October-December period, according to the NOAA Climate Prediction Centre’s latest outlook.
Natural rubber prices could stay supported if synthetic rubber prices remain elevated on higher crude oil and feedstock costs, particularly if El Niño also disrupts natural rubber output, said Muhammedali, an economist at the International Rubber Study Group.
That support could weaken if oil prices normalise or if El Niño disruptions prove milder than expected, given that supply remains relatively ample and consumption growth is slowing, said Muhammedali. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.9copper from last Friday, the exchange said on Friday. Prices remain in a consolidation phase within the 410-435 yen range, with a breakout needed to establish a clearer direction, Japan Exchange Group said in a report on Monday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 221.7 US cents per kg, up 1.6copper as of 0720 GMT.
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