SINGAPORE: Japanese rubber futures rose on Friday underpinned by strong automobile demand, Thailand thunderstorms, and a fire breakout in a Qingdao rubber warehouse.
The Osaka Exchange (OSE) rubber contract for June delivery rose 2 yen, or 0.78%, to close at 256.9 yen ($1.77) per kg. The benchmark contract was up 0.16% this week, sustaining a four-week rally. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was down 95 yuan, or 0.68%, at 13,875 yuan ($1,936.36) per metric ton.
The Shanghai International Energy Exchange confirmed that the storage facility of CMST Shandong International Logistics caught fire on Dec. 30, in which 88 standard warrants of TSR 20 futures were involved. The fire had pushed rubber prices higher, said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company. “However, many tyre manufacturers waited on the sidelines waiting for prices to correct - and no rush for buying could mean the market is still well stocked.”
The British new car market witnessed its best year since the COVID-19 pandemic as easing supply chain issues helped fulfil pent-up vehicle demand, an industry body said. Ford Motor on Thursday posted its best annual auto sales in the US since 2020. The Thai Meteorological Department has warned of Southern thunder showers from Jan. 5-10, potentially affecting the supply of natural rubber. Japan’s benchmark Nikkei average closed 0.27% higher amid investor optimism.
The Japanese yen weakened 0.42% to trade at 145.2 against the dollar. A weaker currency makes yen-denominated assets more affordable to overseas buyers. The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 153.10 US cents per kg, up 0.66%. Japan’s financial markets will be closed on Jan. 8, and trading will resume on Jan. 9.
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