SINGAPORE: Japanese rubber futures rebounded on Friday after a two-day fall, lifted by firmer oil prices, although the most-active contract still suffered a weekly decline amid ample rubber supply and soft demand for end-products.
The Osaka Exchange (OSE) rubber contract for September delivery closed up 1.2 yen, or 0.39%, at 310.8 yen ($2.01) per kg.
The contract lost 1.55% week-on-week to mark its third consecutive weekly decline. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 15 yuan to finish at 14,565 yuan ($2,011.60) per metric ton. Oil prices jumped as reports that Israel had attacked Iran roiled markets and sparked concerns that Middle East oil supply could be disrupted. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Rubber prices for the week drifted downwards with “ample availability of spot cargoes and keen sellers for June loading”, said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.
Better weather conditions in China’s rubber-producing areas and the start of rubber harvesting overseas may cause near-term fresh rubber supply to moderately increase, China-based consultancy Longzhong said in a note, adding that high rubber inventories in China and tepid consumption of rubber’s end-products are also exerting pressure on prices.
Downstream tyre demand is showing seasonal weakness, with factories maintaining a strategy of purchasing raw materials on dips, China-based consultancy Yongan Futures said in a note. Japan’s benchmark Nikkei average posted its largest daily decline in more than two and half years on Friday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 162 US cents per kg, up 0.62%.
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