SHANGHAI: Japanese rubber futures traded in a tight range on Wednesday, with early gains fading on weak downstream demand even as oil prices rebounded and Tokyo equities jumped.
The Osaka Exchange (OSE) rubber contract for April delivery was little changed at 446.6 yen (USD2.83) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 160 yuan, or 0.82 percent, to 19,570 yuan (USD2,935.79) per metric ton. The most active December butadiene rubber contract on the SHFE climbed 545 yuan, or 3.32 percent, to 16,950 yuan per metric ton. Japan’s Nikkei share gauge rose on Wednesday, helped by strong earnings from SK Hynix and renewed optimism in the AI sector, with the benchmark Nikkei climbing 1.08 percent to close at 63,954.19. Firmer risk sentiment typically adds to support for rubber futures. Oil prices climbed more than 1 percent on Wednesday after an attack on a refinery in Saudi Arabia renewed concerns around supply risks from the major exporter.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil Synthetic rubber prices are trending higher, which is expected to keep natural rubber fluctuating at elevated levels in the short-term even as overseas supply is set to increase, analysts from broker GF Futures said in a note.
Weak downstream consumption of semi-steel tyres throughout the year and lower-than-expected automobile sales compared with the same period last year are limiting upside in rubber futures, according to analysts from broker Guangzhou Futures.
The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 249.9 US cents per kg, up 0.6 percent as of 0715 GMT.