Japanese rubber futures rebounded on Wednesday, fuelled by supply shortage fears after top producer Thailand warned of possible flash floods, although sluggish global demand capped gains.
The Osaka Exchange (OSE) rubber contract for December delivery ended daytime trade up 3.5 yen, or 1.1%, at 320.5 yen ($2.16) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery climbed 80 yuan, or 0.55%, to 14,500 yuan ($2,020.31) per metric ton.
The most-active August butadiene rubber contract on the SHFE fell 65 yuan, or 0.56%, to 11,525 yuan ($1,605.80) per ton.
Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from July 19-21.
The market is currently paying attention to the Thai flood warning, said Chinese broker Hexun Futures.
Japanese rubber futures firm on weather woes
The greenback strengthened to 148.91 yen per dollar after reaching a 3-1/2-month peak earlier in the session.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers.
Oil prices rose on expectations of steady demand in the U.S. and China.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Amidst the peak production season across rubber-producing countries, as well as damp international demand, there could be some cap to the upside, said Farah Miller, founder of independent rubber-focused firm Helixtap Technologies.
Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September.
The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 167.3 U.S. cents per kg, up 0.7%.
Comments
Comments are closed for this article.