SHANGHAI: Japanese rubber futures rebounded on Wednesday, supported by stronger physical prices in Thailand after floods disrupted tapping in producing areas, while firmer oil prices also lent support to the market.
The Osaka Exchange (OSE) rubber contract for March delivery was up 8.8 yen, or 1.98percent, at 452.9 yen (USD2.89) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery surged 1,055 yuan, or 5.54percent, to 20,095 yuan (USD2,997.51) per metric ton. It touched its highest since February 20, 2017, earlier in the day.
The most-active November butadiene rubber contract on the SHFE rose 610 yuan, or 3.96percent, to 16,000 yuan per ton. Top rubber producer Thailand’s meteorological agency warned of severe thundershowers from October 4-5, which could disrupt tapping operations. Heavy rains and floods have hit 42 provinces across Thailand since September 16, killing at least 23 people, the Thai interior ministry said on Tuesday.
Thai rubber prices have strengthened significantly over the past two days, reflecting a rebound in weather premiums, analysts from broker Huatai Futures said in a note.
Oil prices rose on Wednesday after US President Donald Trump denied he would be willing to ease sanctions on Iran as Qatar pushed for peace talks. Prices fell in the previous session as crude supply from the Middle East recovered.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Total natural rubber inventory in Qingdao, China, stood at 575,200 tons, as of September 27, down 1.73percent from the previous week, data from commodity information provider Longzhong Information showed. The front-month rubber contract on Singapore Exchange’s SICOM platform for December delivery last traded at 256.3 US cents per kg, up 4.7percent as of 0707 GMT.
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