SINGAPORE: Japanese rubber futures inched higher on Monday on rising raw material, crude prices.

The Osaka Exchange rubber contract for August delivery ended up 1.7 yen, or 0.7%, at 263.0 yen ($2.28) per kg.

Heavy rain over the weekend led to flooding in the southern regions of Thailand, which affected raw material output, a Singapore-based trader said.

Thai rubber sheet prices hit 75.90 baht ($2.32) per kg on Monday, their highest since May 2021.

Oil prices jumped on escalating sanctions against Russia over its invasion of Ukraine, which in turn led President Vladimir Putin to put his country’s nuclear deterrent on high alert.

Synthetic rubber is derived from crude oil and a higher oil market serves as a driver for natural rubber prices as well. The natural rubber market also benefits from stronger oil prices as that could lead to a shift from synthetic rubber.

The rubber contract on the Shanghai futures exchange for May delivery ended down 185 yuan at 13,870 yuan ($2,197.85) per tonne on Monday, hitting the lowest since Nov. 10 at 13,815 yuan earlier in the session.

The front-month rubber contract on Singapore Exchange’s SICOM platform for March delivery last traded at 182.5 US cents per kg, down 0.5%.