SINGAPORE: Japanese rubber futures snapped a two-day losing streak to close higher on Monday amid a weaker yen and severe weather conditions in top producer Thailand, although lower oil prices and geopolitical concerns surrounding key consumer China capped gains. The Osaka Exchange (OSE) rubber contract for October delivery closed up 1.8 yen, or 0.59%, at 308 yen ($1.98) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 200 yuan to finish at 14,405 yuan ($1,991.15) per metric ton. The Japanese yen weakened 0.1% against the dollar. A weaker currency makes yen-denominated assets more affordable to overseas buyers. Thailand’s meteorological agency warned of “severe weather conditions” in upper Thailand from May 13-15, potentially damaging crops. China’s April vehicle sales rose 9.3% year-on-year, China Association of Automobile Manufacturers said.
Rubber inventories in warehouses monitored by SHFE fell 0.2% from its last release on April 26, the exchange said on Friday.
Oil prices extended declines amid signs of weak fuel demand and as comments from US Federal Reserve officials dampened hopes of interest rate cuts. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
US President Joe Biden is set to announce new China tariffs targeting strategic sectors, including a major hike in levies on electric vehicles, according to three people familiar with the matter. China’s consumer prices edged up 0.3% in April year-on-year versus a rise of 0.1% in March.
The producer price index dropped 2.5% in April, easing from a slide of 2.8% in March but extending a 1-1/2-year-long stretch of declines. * The front-month rubber contract on the Singapore Exchange’s SICOM platform for June delivery last traded at 165 US cents per kg, up 1.54%.
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