SINGAPORE: Japanese rubber futures closed higher on Monday, as top consumer China cut key rates to boost its fragile economy, while stronger synthetic rubber prices and supply concerns also lent support to the market.
The Osaka Exchange (OSE) rubber contract for December delivery closed up 4.5 yen, or 1.41%, at 323.5 yen ($2.07) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery inched down 5 yuan, or 0.03%, to finish at 14,550 yuan ($2,000.60) per metric ton.
The most active September butadiene rubber contract on the SHFE was up 125 yuan, or 0.86%, at 14,720 yuan ($2,023.98) per metric ton. China surprised markets by lowering a key short-term policy rate and its benchmark lending rates in an attempt to boost growth, as the country is verging on deflation and faces a prolonged property crisis, surging debt and weak consumer and business sentiment. Supporting natural rubber prices on Monday were also fresh concerns over supply amid heavy rainfall in top producer Thailand, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.
Abundant rainfall was observed in upper Thailand for almost the whole week from July 15-21, and heavy rains may cause flash flood and overflows on July 22, Thailand’s meterological department said. The dollar slipped 0.03% to 157.435 yen as investors gauged the implications of US President Joe Biden’s decision to end his re-election campaign and clear the way for another Democrat to challenge Donald Trump.
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