SHANGHAI: Japanese rubber futures rose for a fifth consecutive session on Tuesday, as tight supply kept physical prices firm, while higher oil prices added to bullish sentiment.
The Osaka Exchange (OSE) rubber contract for October delivery was up 6.5 yen, or 1.62percent, at 407 yen (USD2.55) per kg. The OSE will be closed on Wednesday, April 29, for a holiday. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 180 yuan, or 1.55percent, to 17,395 yuan (USD2,545.25) per metric ton. The most-active June butadiene rubber contract on the SHFE strengthened yuan, or 1.95percent, to 15,925 yuan per ton. Prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber were up 1.33percent and 1.49percent, respectively.
Oil prices rose nearly 2 percent on Tuesday, extending gains from the previous session, as efforts to end the US-Iran war appear stalled. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Rubber supply is expected to rise after the May Day holiday from May 1-5, with the likely beginning of large-scale tapping in Vietnam and Thailand, Chinese broker CITIC Securities Futures said in its weekly research report on April 27.
Traders are also eyeing a zero-tariff agreement for African imports into China, which will come into effect on May 1. It will affect rubber imports from the Ivory Coast into China, the world’s top consumer.