SINGAPORE: Japanese rubber futures rose on Tuesday, snapping a two-day losing streak on signs of easing trade regulations in China over Nexperia chip exports, while a weak yen provided further support.
The Osaka Exchange (OSE) rubber contract for April delivery was up 1 yen, or 0.32percent, at 312 yen (USD2.07) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery dipped 215 yuan, or 1.42 percent, to 14,875 yuan (USD2,088.31) per metric ton.
The most-active December butadiene rubber contract on the SHFE fell 240 yuan, or 2.3percent, to 10,205 yuan per metric ton. Automotive suppliers scrambled on Monday to obtain exemptions from Chinese export restrictions on Nexperia chips, seeking a solution to a trade stand-off that has threatened to disrupt assembly lines. Following the Dutch government’s move to take control of Nexperia, owned by Chinese company Wingtech, China responded by restricting the export of its products.
Companies welcomed signs of easing, as China began allowing the export of existing stock with special permission. Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber tyres. The yen was last flat at 154.11 per dollar after hitting an eight-and-a-half month low earlier, with markets underwhelmed by Bank of Japan’s gradual approach towards rate hikes. A weaker currency makes yen-denominated assets more affordable to overseas buyers. Oil prices dipped as markets read OPEC+’s decision to pause output hikes as a signal of oversupply in the market.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 167.4 US cents per kg, down 2.1percent.
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