TOKYO: Japanese rubber futures rose to a six-week high on Monday, supported by lingering concerns over tighter supply and Shanghai's post-holiday surge as investors bet on a steady economic recovery in top rubber consumer China.
Osaka Exchange's (OSE) rubber contract for March delivery finished 3.8 yen, or 2.0%, higher at 198.5 yen ($1.88) per kg. It hit the highest since Aug. 31 of 199.3 yen earlier in the session.
"Worries over lower supply from top producers prompted fresh buys," said Jiong Gu, an analyst at Yutaka Shoji Co.
The International Tripartite Rubber Council (ITRC), which groups Thailand, Indonesia and Malaysia, warned last month it expected a decrease in production of natural rubber for rest of 2020, and further decline into early 2021.
"Given the stronger physical rubber prices in Thailand, the OSE benchmark could reach to a 210 yen level," Gu said.
The most-active rubber contract on the Shanghai futures exchange for January delivery soared 355 yuan to finish at 13,165 yuan ($1,951) per tonne, on positive economic data of a rebound in tourism and consumption over the week-long holiday break in China.
The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 146.8 US cents per kg, up 2.6%.-Reuters
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