Crude oil rally, Chinese government spending lift international prices
TOKYO — Natural rubber prices have soared to their highest since December 2013 on anticipation of increased Chinese demand and higher prices for competing synthetic rubber.
The most actively traded contract for ribbed smoked sheet No. 3 on the Tokyo Commodity Exchange climbed 3.7 yen to 259.7 yen ($2.25) per kilogram Tuesday, marking a third straight trading day of gains.
An agreement by OPEC, Russia and other oil producers outside the bloc to cut output has powered a sharp rise in crude oil prices in the U.S. and Europe. Expectations that this will push synthetic rubber prices higher drove buying of natural rubber as well. Synthetic rubber is derived from petrochemicals.
Hopes of increased public works spending in China have accelerated a rise in rubber futures in Shanghai, fueling an influx of speculative money in Tokyo. But some market players contend that a correction will come as speculators take profits.
(Nikkei)
