SINGAPORE: Japanese rubber futures hit a one-week high on Friday, buoyed by robust spot cargo demand and strong crude oil prices.

The Osaka Exchange (OSE) rubber contract for May delivery was up 2.3 yen, or 1%, at 242.5 yen ($1.70) per kg at closing.

This week, the benchmark contract gained 1.8%, recording its best week in more than a month. The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was up 145 yuan, or 1.1%, at 13,910 yuan ($1,946.90) per metric ton.

“In Thailand, the cost of raw materials has increased significantly due to the presence of leaf disease in certain trees,” said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company. “The rise in prices can also be attributed to some consumers supporting the immediate demand for spot cargo.” “Nevertheless, this price increase might be temporary, given the limited shift in Chinese buying interest, which has been subdued. Additionally, the large warehouse stockpile is discouraging new purchases,” Miller added.

Oil prices rose as much as 1% on Friday as tensions persisted in the Middle East following Houthi attacks on ships in the Red Sea, although Angola’s decision to leave OPEC raised questions over the group’s effectiveness in supporting prices.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The yen was up 0.1% at 142.2 against the dollar. Japan’s benchmark Nikkei average closed 0.09% higher. The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 147.2 US cents per kg, up 1.2%.