TOKYO: Japanese rubber futures extended gains to a third session on Wednesday, supported by higher oil prices, which outweighed the prospect of increased supply from major producers.
The Osaka Exchange (OSE) rubber contract for December delivery was up 4.2 yen, or 0.98 percent, at 431.8 yen (USD2.66) per kg, its highest since June 25.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 240 yuan, or 1.42 percent, to 17,190 yuan (USD2,539.97) per metric ton.
The most active September butadiene rubber contract on the SHFE surged 610 yuan, or 4.6 percent, to 13,880 yuan per metric ton, extending gains for a ninth straight session to touch its highest since June 8.
Oil extended gains on Wednesday as President Donald Trump reimposed a naval blockade on all Iranian ports and Tehran launched strikes on US infrastructure in the region.
Natural rubber often tracks oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Top rubber producer Thailand is gradually entering the peak tapping season, which typically increases natural rubber supplyin the coming months, although the market remains highly sensitive to weather, Chinese broker Founder CIFCO Futures said in a note.
Rainfall disruptions in producing regions have slightly increased raw material prices in the near term, but this does not offset the broader seasonal hike in output during peak season, according to analysts at Chinese broker Everbright Futures.
Rubber production is usually low from February to May, followed by 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 219 US cents per kg, up 0.7 percent as of 0700 GMT.
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