Japanese rubber futures extend gains on firm physical prices

SHANGHAI: Japanese rubber futures rose for the fifth straight session on Tuesday, underpinned by firm physical prices as trading resumed in key buyer China after the Lunar New Year holiday.

The Osaka Exchange (OSE) rubber contract for August delivery was up 11.6 yen, or 3.25percent, at 368.8 yen (USD2.38) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery rose 640 yuan, or 3.9percent, to 17,030 yuan (USD2,470.08) per metric ton.

The most-active March butadiene rubber contract on the SHFE rose 515 yuan, or 4.08percent, to 13,140 yuan per ton. Higher price volatility is expected with the return of China after the Lunar new Year holiday, though firm raw material costs will continue to support physical prices, a Singapore-based rubber trader told Reuters.

Rubber crops usually undergo a season of low production from February to May, before entering a peak harvesting period that lasts until September. Tokyo rubber prices were underpinned by a weak yen and firmer crude oil prices, a report form the Japan Exchange group said on Monday.

The yen weakened to 155.05 per dollar on Tuesday as markets weighed the fallout on global trade from renewed turbulence over US President Donald Trump’s tariff regime.

A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. Oil prices rose on Tuesday, nearing seven-month highs, with traders assessing geopolitical risks ahead of another round of US-Iran nuclear talks, while US trade policy uncertainty added to broader concerns.

The front-month rubber contract on Singapore Exchange’s SICOM platform for March delivery last traded at 197 US cents per kg, up 1.1percent, as of 0700 GMT.