SINGAPORE, May 7 (Reuters) –
- Japanese rubber futures rose on Tuesday after returning from a slew of market holidays, supported by higher oil prices and a weaker yen.
- The Osaka Exchange (OSE) rubber contract for October delivery JRUc6, 0#2JRU: was up 4.2 yen, or 1.39%, at 306.9 yen ($1.99) per kg as of 0157 GMT.
- The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery SNRv1 was up 225 yuan, or 1.59%, at 14,355 yuan ($1,988.89) per metric ton.
- Oil prices ticked up after Israel struck Rafah in Gaza while negotiations for a ceasefire with Hamas continued without resolution. O/R
- Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
- The yen JPY= continued to drift lower against the dollar on Tuesday as gaping interest rate differentials weighed on the currency, despite fresh warnings from Japanese officials following two rounds of suspected dollar-selling intervention last week. A weaker currency makes yen-denominated assets more affordable to overseas buyers. FRX/
- Japan’s benchmark Nikkei average .N225 opened 1.05% higher. .T
- Top rubber producer Thailand’s meteorological agency warned of heavy rains and flashing floods in upper Thailand from May 6-12, potentially causing crop damage.
- Domestic travellers spent 166.9 billion yuan ($23.12 billion) during one of China’s longest breaks, the May Day holiday, a rise of 13.5% from pre-pandemic levels, government data showed, but expenditure per head lagged 2019 rates.
- Chinese President Xi Jinping said on Monday that there was no such thing as “China’s overcapacity problem”, whether viewed from the perspective of comparative advantage or global market demand, according to China’s state-run Xinhua news agency.
- The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery STFc1 last traded at 163.9 U.S. cents per kg, up 1.4%.
($1 = 154.3900 yen)
($1 = 7.2176 yuan)
Certainly! Let’s dive into the world of rubber futures and explore the recent developments:
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Japanese Rubber Futures Rise:
- Japanese rubber futures experienced an upward trend after returning from a series of market holidays. This rise was supported by higher oil prices and a weaker yen.
- The Osaka Exchange (OSE) saw the rubber contract for October delivery (JRUc6) increase by 4.2 yen (or 1.39%) to reach 306.9 yen (approximately $1.99) per kilogram at 0157 GMT.
- Similarly, the rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery (SNRv1) rose by 225 yuan (or 1.59%) to reach 14,355 yuan (approximately $1,988.89) per metric ton.
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Oil Prices and Natural Rubber:
- Natural rubber often takes cues from oil prices, as it competes for market share with synthetic rubber, which is derived from crude oil.
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Currency Dynamics:
- The yen (JPY) continued to weaken against the dollar due to interest rate differentials, despite recent warnings from Japanese officials following suspected dollar-selling intervention.
- A weaker currency makes yen-denominated assets more attractive to overseas buyers.
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Thailand’s Weather Warning:
- Thailand, a top rubber producer, received a meteorological agency warning about heavy rains and flashing floods in upper Thailand from May 6-12. These weather conditions could potentially cause crop damage.
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China’s May Day Holiday Spending:
- During China’s extended May Day holiday, domestic travelers spent a total of 166.9 billion yuan (approximately $23.12 billion). This represents a 13.5% increase from pre-pandemic levels. However, expenditure per head remained below the rates observed in 2019.
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China’s Overcapacity Problem:
- Chinese President Xi Jinping stated that there is no such thing as “China’s overcapacity problem.” He emphasized this perspective from both the standpoint of comparative advantage and global market demand.
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Front-Month Rubber Contract on SICOM:
- The front-month rubber contract on the Singapore Exchange’s SICOM platform for June delivery (STFc1) last traded at 163.9 U.S. cents per kilogram, marking a 1.4% increase.
Remember, these market dynamics are influenced by a complex interplay of economic factors, geopolitical events, and weather conditions.
Source:
Reuters
