SINGAPORE/TOKYO: Japanese rubber futures extended gains to an eighth session on Thursday, touching a seven-year high, as the contract tracked soaring physical rubber prices amid supply concerns, while higher oil prices also prompted buying.

The Osaka Exchange (OSE) rubber contract for August delivery ended up 4.6 yen, or 1.4%, at 333 yen ($2.25) per kg, the highest close since Jan. 31, 2017. The contract climbed to 335.6 yen earlier in the session.

The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery gained 200 yuan to finish at 14,380 yuan ($1,999.25) per metric ton. Prices at top rubber producer Thailand’s benchmark smoked rubber sheet (RSS3) hit their highest levels in seven years amid weather woes. Its export-grade rubber sheet was quoted at 96.36 Thai baht ($2.67) per kg on a free-on-board basis on Thursday, the highest since February 2017.

Thailand’s meteorological agency continued to warn of hot weather accompanied with thunderstorms in various regions from March 14-20. In view of the widening global supply shortage, physical prices for rubber “are expected to continue moving along a rising trend, potentially with an increasing momentum, during March, April and May,” said Jom Jacob, chief analyst and co-founder of India-based analysis firm What Next Rubber.