SHANGHAI: Japanese rubber futures rose on Tuesday, buoyed by an oil price rally and firmer spot rubber prices in key producing regions, although a stronger yen capped the advance.
The Osaka Exchange (OSE) rubber contract for February delivery was up 2 yen, or 0.46percent, at 438.6 yen (USD2.85) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 525 yuan, or 2.75percent, to 19,635 yuan (USD2,925.88) per metric ton, touching its highest since October 8, 2024.
The most active October butadiene rubber contract on the SHFE gained 335 yuan, or 2.15percent, to 15,920 yuan per metric ton. The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) was down 0.37percent at 91.94 baht per kg, while block rubber was up 1.92percent at 83.34 baht per kg.
Rising raw material prices in major production areas have lent significant support to spot costs, feeding through to gains in futures, broker Tianfeng Futures said in a note.
Oil prices extended gains to multi-week highs on Tuesday as risks of a prolonged conflict in the Middle East grew after Iran threatened to retaliate against any new US attacks on its assets, heightening worries over supply disruption.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The Japanese yen climbed to a seven-month high against the US dollar on Tuesday, as traders continued to unwind short positions amid growing bets of a Bank of Japan interest rate hike, putting pressure on the dollar ahead of CPI data this week.
A stronger currency makes yen-denominated assets less affordable to overseas buyers. The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 247.2 US cents per kg, up 2.6percent as of 0703 GMT, hitting its highest this year.
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