SHANGHAI: Japanese rubber futures rose on Wednesday, snapping a five-session losing streak, supported by supply concerns triggered by heavy rain in Thailand and declining inventories in top consumer China.
The Osaka Exchange (OSE) rubber contract for February delivery was up 4.6 yen, or 1.09percent, at 425.2 yen (USD2.74) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 100 yuan, or 0.53percent, to 18,875 yuan (USD2,814.06) per metric ton.
The most active October butadiene rubber contract on the SHFE gained 390 yuan, or 2.62percent, to 15,260 yuan per metric ton. Top rubber producer Thailand’s meteorological agency warned of severe rains and flash floods from September 17 to 21.
Raw material prices in Thailand are expected to stay elevated as seasonal supply gains are offset by continued rainfall disruption, providing cost support for natural rubber, analysts at broker GF Futures said in a note on Wednesday.
Tyre companies are buying on price dips and Qingdao inventory continues to decline, with TSR 20 futures inventories at a low level, the analysts said.
China is the world’s top rubber consumer and its stockpile levels are closely watched as a gauge of regional demand. Futures prices have slipped below the physical spread following profit-taking and portfolio rebalancing, suggesting the spread will narrow in the coming days, a Singapore-based trader said.
The front-month rubber contract on Singapore Exchange’s SICOM platform for December delivery last traded at 235.7 US cents per kg, up 0.9percent as of 0700 GMT.
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