Japanese rubber futures hit 15-year high on firm raw material costs

SHANGHAI: Japanese rubber futures surged to a 15-year high on Thursday as trading resumed after a long holiday, with prices supported by firm raw material costs and concerns about supply from key producer Ivory Coast due to port congestion.

The Osaka Exchange (OSE) rubber contract for February delivery was up 20.10 yen, or 4.67percent, at 450.30 yen (USD2.84) per kg. It touched its highest since April 13, 2011 in intraday trade. The market was closed from Monday to Wednesday for a holiday.

The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 480 yuan, or 2.51percent, to 19,600 yuan (USD2,919.93) per metric ton, its highest since September 10.

The most-active November butadiene rubber contract on the SHFE surged 850 yuan, or 5.73percent, to 15,680 yuan per ton.

The rally has been driven by a combination of factors, including the impact of El Niño, congestion at Ivory Coast’s Abidjan port, and reduced raw material supplies, said a Singapore-based rubber trader. *Top rubber producer Thailand’s meteorological agency warned of severe rains and flash floods from September 23 to 27.

Rubber tapping in Thai producing areas remains disrupted by rainfall, keeping raw material prices firm, analysts from broker Shenyin Wanguo Futures said in a note.

Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber prices were up 1.13percent and 0.49percent, respectively. The front-month rubber contract on Singapore Exchange’s SICOM platform for December delivery last traded at 250.40 US cents per kg, up 1.6percent.