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Friday, December 1, 2023

Japanese rubber futures rise on global output worries

BEIJING: Japanese rubber futures hit their highest level in more than a year on Monday, lifted by strong crude oil prices and concerns over declining production in top producers Thailand and Indonesia.

The Osaka Exchange rubber contract for March delivery ended 0.39% higher at 260.6 yen ($1.74) per kg, hitting its highest closing since June 10, 2022.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.7 % from last release on Sept. 28, the exchange said on Friday. Japan’s Nikkei share average fell 2.03% dragged by chip-related shares, with risk appetite being hurt as tensions in the Middle East escalated.

The period from mid-September to mid-January is typically the peak production season globally, but largest producers Thailand and Indonesia are instead facing a production downtrend, Jom Jacob, co-founder of India-based analyst firm What Next Rubber.

“Unless production returns to normal, there could be considerable shortage in the forthcoming lean season of production from end-January to end-June.”

The rubber contract on the Shanghai futures exchange for January delivery was up 30 yuan at 14,750 yuan ($2,017.43) per metric ton. The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 148.2 US cents per kg, up 0.3%.

Oil prices fell after rallying to more than $90 per barrel, with investors waiting to see if the Israel-Hamas conflict draws in other countries – a development that would potentially drive up prices further and deal a fresh blow to the global economy.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

Japanese rubber futures rise on global output worries

Source: Brecorder

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