BEIJING: Japanese rubber futures ticked up on Monday, recouping some of the previous session’s losses, on concerns over supply disruptions in key producer Thailand and as the market tracked gains in crude oil prices.
The Osaka Exchange (OSE) rubber contract for April delivery closed up 2.4 yen, or 0.9%, at 268.6 yen per kg. The contract had fallen 2.8% on Friday. Physical prices in key Asian markets are driven by the continuing supply disruptions in South Thailand and bets of a tight supply emerging globally by the first quarter of 2024, Jom Jacob, co-founder of India-based analysis firm What Next Rubber, said.
The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was unchanged at 14,365 yuan per metric ton. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.5% from Nov. 10, the exchange said on Friday.
An increase in the natural rubber inventory held at the warehouses is weighing on SHFE natural rubber contracts in the week ahead, Jacob said. Japanese shares climbed to highs not seen since 1990 on Monday as strong earnings and offshore demand fuelled a three-week winning streak, while other Asian markets were more mixed with eyes fixed on the US rate outlook. Oil futures nudged higher, extending gains on expectations of OPEC+ deepening supply cuts to shore up prices, which have fallen for four weeks on easing concern of Middle East supply disruption amid the Israel-Hamas conflict.
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 December delivery last traded at 149.4 US cents per kg, up 1.9%.