SINGAPORE: Japanese rubber futures edged higher for a second session on Tuesday, buoyed by bullish Asian shares and a strong Nikkei, and as supply concerns weighed on traders.
The Osaka Exchange (OSE) rubber contract for March delivery was up 1 yen, or 0.4%, at 232 yen ($1.56) per kg at closing. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was down 120 yuan, or 0.8%, at 13,985 yuan ($1,917.57) per metric ton.
“The Northeast Thailand floods indicate shifting weather patterns, potentially altering supplies over time, thus supporting fundamental rubber prices,” said a Singapore-based trader.
The Thai Metrological Department has warned of fairly widespread thunder showers and isolated heavy rains with gusty winds across the major rubber producer.
“Additionally, escalating Middle East conflict may further engage international parties, likely bolstering oil prices,” the trader added. Oil prices eased on Tuesday after rallying more than 4% in the previous session, with traders cautious as they keep tabs on potential supply disruptions amid military clashes between Israel and the Palestinian group Hamas. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Japan’s benchmark Nikkei average closed up 2.43% and recorded its largest daily gain in nine months on Tuesday, led by energy-related shares, as buoyant risk appetite spilled over from Wall Street and investors scooped up beaten-down stocks.
Asian shares rose as bond yields eased, boosted by dovish US Federal Reserve remarks and a dip in oil prices after Monday’s surge, but markets remained cautious amid violence in the Middle East.
Comments
Comments are closed for this article.