SINGAPORE: Japanese rubber futures ticked up on Tuesday, underpinned by top consumer China’s firmer economic data and optimism about the country’s consumption stimulus, while off-season supply woes also supported prices.
The Osaka Exchange (OSE) August rubber contract ended daytime trade with a gain of 5.4 yen, or 1.58%, to 346.9 yen ($2.32) per kg. The May rubber contract on the Shanghai Futures Exchange (SHFE) edged 20 yuan lower, or 0.12%, to 16,965 yuan ($2,346.08) per metric ton. The most active May butadiene rubber contract on the SHFE rose 175 yuan, or 1.28%, to 13,880 yuan ($1,919.46) per ton.
Hong Kong stocks rallied to a three-year high on Tuesday, as improving consumption data and a fresh stimulus to boost domestic spending have helped alleviate concerns about economic fundamentals. China’s industrial output rose 5.9% in the first two months of the year, from a year earlier, official data showed on Monday, beating expectations for a 5.3% rise in a Reuters poll.
US President Donald Trump on Monday suggested that Chinese President Xi Jinping may visit the United States “in the not-too-distant future”, further raising expectations that some sort of breakthrough deal could reduce tariffs.
Still, Qingdao’s total spot inventory continued to accumulate, causing a month-on-month expansion, said broker Hexun Futures in a note. Global natural rubber production areas are in low production and raw material prices will fluctuate at a high level, added Hexun.
Rubber crops usually undergo a season of low production from February to May before a peak harvesting period that lasts until September.
From March 18-20, the eastern and southeastern winds will strengthen, with more isolated heavy rains over the south of Thailand, the country’s meteorological agency said. The front-month rubber contract on the Singapore Exchange’s SICOM platform for March delivery last traded at 195.4 US cents per kg, up 1%.
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