BENGALURU: Japanese rubber futures rose on Wednesday, as oil prices climbed on Middle East supply concerns, though persistently weak domestic car sales in China, the world’s top rubber consumer, limited the advance.
The Osaka Exchange (OSE) rubber contract for January delivery was up 3 yen, or 0.71 percent, at 426 yen (USD2.67) per kg. The market was closed on Tuesday for a holiday.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 85 yuan, or 0.48 percent, to 17,950 yuan (USD2,660.84) per metric ton.
The most active September butadiene rubber contract on the SHFE gained 310 yuan, or 2.36 percent, to 13,420 yuan per metric ton.
Oil prices rose on Wednesday as doubts about a US-Iran peace deal and attacks on two ships fuelled concerns about disruptions to Middle East supplies, although industry data showed swelling inventories of US crude.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Gains were tempered, however, by continued softness in China’s domestic auto market, even as vehicle exports surged.
China’s car sales fell for a 10th straight month in July, though the pace of decline eased, contrasting with strong export growth as automakers step up overseas expansion to offset cut-throat competition in the world’s largest auto market.
Sales at home slid 21.1 percent last month from a year earlier to 1.47 million vehicles, while exports rose 88.2 percent to 923,000, data from the China Passenger Car Association (CPCA) showed on Tuesday.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 220.5 US cents per kg, up 0.3 percent as of 0700 GMT.
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