BEIJING: Japanese rubber futures extended gains on Tuesday, supported by higher crude oil prices after the US military carried out strikes in southern Iran in what it described as defensive actions.
Markets remained cautious as hopes for a peace deal to end the Iran war faded, traders said.
The Osaka Exchange (OSE) rubber contract for October delivery,: was up 0.1 percent at 409 yen (USD2.57) per kg, as of 0658 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 0.46 percent to 17,330 yuan (USD2,559.49) per metric ton.
The most-active June butadiene rubber contract on the SHFE fell 1.8 percent to 14,460 yuan per ton.
Brent crude futures rose more than 2 percent on Tuesday.
“The market continues to trade within a range while awaiting further developments on the US-Iran situation. There is nothing materially significant at the moment, and price action appears to be largely speculative and headline-driven,” said an Asian trader.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
An end to the Iran war would ease inflationary pressure and pave the way for a recovery in Middle East tyre demand. The Middle East is one of the largest importers of Chinese-manufactured car tyres, which are made from rubber.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 220.8 US cents per kg, down 1 percent.
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