SHANGHAI: Japanese rubber futures edged higher on Thursday as oil prices jumped to a six-week high, though soft demand from China, the world’s top rubber consumer through its tyre and automotive sectors, capped gains.
The Osaka Exchange (OSE) rubber contract for December delivery was up 0.9 yen, or 0.21percent, at 421.6 yen (USD2.59) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 105 yuan, or 0.62percent, to 17,030 yuan (USD 2,515.81) per metric ton.
The most active September butadiene rubber contract on the SHFE gained 210 yuan, or 1.53percent, to 13,970 yuan (USD2,063.76) per metric ton. Oil prices rose for a fifth day on Thursday on increasing concerns about supply availability amid attacks on tankers in the Red Sea by Yemen’s Houthis and strikes between the US and Iran that have once again nearly shut the Strait of Hormuz.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The market has stayed relatively calm despite the escalating conflict, but elevated oil prices could keep inflationary pressures high, which may lend broader support to commodity prices unless a meaningful economic slowdown emerges, a Singapore-based rubber trader said. Softer demand signals from China’s tyre sector, however, capped gains.
The capacity utilisation rate at sample semi-steel tyre manufacturers stood at 57.08percent as of July 16, down 3.54 percentage points from a month earlier, according to a note from Chinese broker GF Futures. All-steel tyre utilisation rose 2.09 percentage points to 62.65percent as some manufacturers resumed output after earlier maintenance, though overall shipments remained below expectations, the note said.
The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 217.1 US cents per kg, up 0.8percent as of 0700 GMT.
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