SHANGHAI: Japanese rubber futures rose for a second straight session to a near-two-week high on Wednesday, supported by a rebound in raw material purchases by tyre manufacturers as prices fell, higher oil prices and a rally in Tokyo equities.
The Osaka Exchange (OSE) rubber contract for April delivery rose 17.2 yen, or 4.06 percent, to 440.8 yen (USD2.78) per kg, its highest close since October 30.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery climbed 680 yuan, or 3.62 percent, to 19,475 yuan (USD2,917.95) per metric ton. The most active January butadiene rubber contract on the SHFE rose 220 yuan, or 1.44 percent, to 15,455 yuan per ton. Downstream tyre demand remains lacklustre, but tyre manufacturers have recently stepped up raw material purchases as prices have fallen, analysts from broker Huatai Futures said in a note.
Rubber output is nearing the end of its seasonal cycle, and with some raw material diverted to concentrated latex production, growth in whole-latex rubber output is expected to be limited, continuing to support natural rubber futures, the analysts said.
Oil prices rose as the market swung between hopes for a de-escalation in the US-Israeli war on Iran and concerns about attacks on shipping in the Strait of Hormuz. 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 gauge climbed for a third straight session as data and earnings reports restored some optimism to the battered AI sector.
Firmer risk sentiment tends to support rubber futures. The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 247.6 US cents per kg, up 3.6 percent as of 0700 GMT.