SHANGHAI: Japanese rubber futures rose to a two-month high on Thursday, as traders priced in an expected reduction in supply once Southeast Asia’s peak production season ends in September, while a rally in oil prices also lent support.
The Osaka Exchange (OSE) rubber contract for January delivery was up 3 yen, or 0.69percent, at 438.40 yen (USD2.77) per kg, touching its highest level since June 25.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 295 yuan, or 1.62percent, to 18,460 yuan (USD2,745.43) per metric ton.
The most-active October butadiene rubber contract on the SHFE lost 100 yuan, or 0.69percent, to 14,465 yuan per ton. With September marking the end of Southeast Asia’s peak production season, market players are pricing in an expected reduction in supply, a Singapore-based trader said.
Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September. Oil prices climbed on Thursday on concerns that the impasse in the US-Israeli war on Iran will continue to disrupt supply from the key Middle Eastern producing region and tighten global supplies.
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 Singapore Exchange’s SICOM platform for November delivery last traded at 228.7 US cents per kg, up 1.6percent as of 0700 GMT.