SINGAPORE: Japanese rubber futures rose on Wednesday to snap a three-day losing streak, tracking Shanghai gains. Soaring oil prices also boosted risk appetite and fuelled expectations that users of synthetic rubber, which is derived from crude oil, may switch to natural rubber.
The Osaka Exchange rubber contract for August delivery ended up 4.5 yen, or 1.9 %, at 247.5 yen ($2.14) per kg. Earlier in the session, the benchmark rose more than 3%, marking its biggest intraday rise since Jan. 19.
Oil prices firmed on Wednesday over fears of a potential supply shock as the United States banned Russian oil imports, and amid signs that some buyers were shunning them. “Chinese traders are expecting crude prices to go even higher. This could have a more supportive impact on commodities as a whole,” a Singapore-based trader said.
Synthetic rubber is derived from crude oil and a stronger oil market boosts natural rubber prices as well. The natural rubber market benefits from stronger oil prices, which could lead to a shift from synthetic rubber.
The rubber contract on the Shanghai futures exchange for May delivery rose 520 yuan to 14,190 yuan ($2,246.11) per tonne, marking its biggest daily percentage increase since Nov. 22.
The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 180.1 U.S. cents per kg, up 2.0%. Traders in rubber markets appeared to have shrugged off news that Japan’s economic rebound was softer than initial estimates in the final quarter of 2021, according to revised data on Wednesday, as the pickup seen in consumer and business spending was weaker than first reported.
Comments
Comments are closed.