Japanese rubber futures rise on near-term tapping disruptions

SHANGHAI: Japanese rubber futures rose on Thursday, as increased rainfall in Thailand’s producing regions raised concerns over near-term tapping disruptions, while a sharp rally in oil prices a day earlier also lent support.

The Osaka Exchange (OSE) rubber contract for January delivery was up 6.1 yen, or 1.48percent, at 417.9 yen (USD2.55) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 35 yuan, or 0.21percent, to 16,385 yuan (USD2,424.61) per metric ton.

The most-active September butadiene rubber contract on the SHFE rose 115 yuan, or 0.89percent, to 12,970 yuan per ton. Major natural rubber producing areas in top producer Thailand have seen increased rainfall this week, which may affect tapping and raw material output in the short term, providing some upward support for prices, Fu Chao, analyst at Chinese broker Guangzhou Futures, said in a note. Thailand’s meteorological agency warned of severe rains and flash floods from July 31 to August 4, which could disrupt tapping in key producing areas.

Oil prices climbed about 7percent on Wednesday as airstrikes resumed in the Middle East, adding to worries about dwindling supply as US government data showed domestic crude inventories fell to a multi-year low.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Japan’s Nikkei share average rose on Thursday as Advantest’s higher profit forecast lifted chip-related stocks, while banks pulled down the broader Topix. The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 210.6 US cents per kg, up 0.3percent as of 0700 GMT.