SINGAPORE: Japanese rubber futures rose on Tuesday after a four-session losing streak, underpinned by stabilising prices and persistent rains in top producer Thailand.
The Osaka Exchange (OSE) rubber contract for February delivery added 1.7 yen, or 0.54percent, to 318 yen (USD2.17) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 170 yuan, or 1.07 percent, to 16,040 yuan (USD2,254.61) per metric ton. The most active October butadiene rubber contract on the SHFE gained 85 yuan, or 0.73 percent, to 11,675 yuan per metric ton.
Rubber futures moved into overbought territory last week amid concerns over elevated cup-lump prices after the recent rainy season, Japan Exchange Group said in a report.
As a result, market estimates suggested that nearly 60percent of futures accumulated in the prior week were unwound, further pressuring prices. Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from September 17-19.
Meanwhile, China is targeting 32.3 million vehicle sales in 2025, below the 32.9 million units projected by the China Association of Automobile Manufacturers, as part of a plan to support stable growth in China’s auto sector.
Lower automobile prices, driven by fierce competition, exert a downward pressure on rubber tyre prices. Broadly, the dollar slipped 0.3percent to 146.975 yen.
A weaker currency makes yen-denominated assets more affordable to overseas buyers. Oil prices edged up as investors weighed potential supply disruptions from Russia after Ukrainian drone attacks on its refineries.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on the Singapore Exchange’s SICOM platform for September delivery last traded at 174.3 US cents per kg, up 0.1percent.