TOKYO: Japanese rubber futures climbed on Monday, as lower domestic inventories raised concerns of supply tightness, while China’s efforts to boost its economy and property sector led to demand optimism for the world’s top consumer.
The Osaka Exchange (OSE) rubber contract for May delivery finished 4.1 yen higher at 270.1 yen ($1.8) per kg. The November contract expired at 257.0 yen per kg on Friday.
The rubber contract on the Shanghai futures exchange for January delivery gained 15 yuan to finish at 13,935 yuan ($1,932.44) per metric ton.
“Low rubber inventories in Japan and seasonal factor provided support,” said Jiong Gu, an analyst at Yutaka Trusty Securities, pointing to the tendency for prices to rise toward the end of year in the recent years.
“Still, technical adjustments such as switching to the May contract from the April futures after the expiration of November contract on Friday were more prevalent,” Gu said, predicting the OSE prices would come under pressure due to profit-taking at above 270 yen. Rubber inventories at OSE warehouses stood at 3,692 metric tons as of Nov. 10, down 256 tons from Oct. 31.
Chinese government advisers will recommend economic growth targets for next year ranging from 4.5% to 5.5% to an annual policymakers’ meeting, as Beijing seeks to create jobs and keep long-term development goals on track, Reuters reported last week. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 8.6% from a week earlier, the exchange said on Friday.
Japan’s benchmark Nikkei average ended lower on Monday as investors turned cautious ahead of US inflation data, prompting them to sell stocks to lock in profits.
The front-month rubber contract on Singapore Exchange’s SICOM platform for December delivery last traded at 145.5 US cents per kg, down 0.8%.