Japanese rubber futures rise

JAKARTA: Japanese rubber futures rose on Tuesday ahead of US and China’s second day of talks in London, hoping to resolve a trade dispute that has threatened a global supply chain shock and slower economic growth.

The Osaka Exchange (OSE) rubber contract for November delivery was up 7.2 yen, or 2.49%, at 296.8 yen per kg as of 0817 GMT.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 165 yuan, or 1.21%, to 13,805 yuan per metric ton.

The most active July butadiene rubber contract on the SHFE fell 5 yuan, or 0.04%, to 11,230 yuan per metric ton. The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) was up 2.67% to 75.87 baht, while block rubber dropped 13.25% to 60.68 baht. “Demand is still relatively muted so perhaps the futures market may trade range-bound until new support/resistance levels are hit,” said Farah Miller, founder of rubber-focused data firm Helixtap in Singapore. The yen eased against the US dollar.

A weaker currency makes yen-denominated assets more affordable to overseas buyers. Japan’s Nikkei 225 Index climbed 0.3%. Oil prices edged up as market participants waited for the outcome of the US-China talks that could, in addition to easing trade tensions, improve fuel demand.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Market was divided following signs of an improving US-China trade relationship. But gains were capped by concerns about rising output from key producing countries as the wintering season ended, Japan Exchange Group said. Rubber usually undergoes a season of low production from February to May before a peak harvesting period that lasts until September.

Michelin will close a plant in central Mexican state of Queretaro by the end of 2025, the tyre maker said. The front-month rubber contract on Singapore Exchange’s SICOM platform for July delivery last traded at 162.7 US cents per kg, up 0.3%.