SINGAPORE: Japanese rubber futures climbed on Wednesday tracking the Shanghai market and on tight raw material supply from top-producer Thailand.
The Osaka Exchange rubber contract for September delivery finished up 3.7 yen, or 1.5%, at 256.3 yen ($2.10) per kg, marking its biggest daily percentage increase since March 22.
OSE prices rose on higher Shanghai prices, which may have been due to stronger rubber demand from tyre factories in China that have resumed production, said a Singapore-based trader.
While some factories are still suspending production and facing logistical delays due to the ongoing COVID-19 spike in China, demand for rubber from the country seems to be getting stronger, he added.
Raw material supply from Thailand is also tight due to the ongoing wintering season in the country, and Thai rubber tappers may only resume tapping after the country celebrates its traditional new year, or Songkran, in mid-April, he said.
Wintering is when rubber trees temporarily slow latex production while they shed old leaves and grow new ones.
The rubber contract on the Shanghai futures exchange for May delivery was up 220 yuan to finish at 13,585 yuan ($2,138.76) per tonne. Earlier in the session, it gained more than 1.9%, marking its biggest percentage increase since March 9.
General Motors’ joint venture in Shanghai has maintained production amid the city’s lockdown by asking workers to sleep on factory floors and getting passes for trucks to continue deliveries, two people familiar with the matter said. China stocks closed higher on Wednesday, with the property sector leading gains, as traders found comfort in the progress made in Ukraine-Russia peace talks and awaited more stimulus measures domestically.