SINGAPORE: Japanese rubber futures climbed up Tuesday, buoyed by a pick up in global oil prices, but supply pricing concerns and a rally in yen capped gains.
The Osaka Exchange (OSE) rubber contract for May delivery closed up 8.3 yen, or 2.33%, at 365 yen($2.37) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery closed up 80 yuan, or 0.46%, at 17,470 yuan($2,407.43) per metric ton. The most active January butadiene rubber contract on the SHFE closed up 70 yuan, or 0.55%, to 12,770 yuan($1,759.75) per ton.
“The climb is likely due to hiccups in Thailand’s raw materials. Despite expected abundance, prices didn’t drop, showing strong market support. However, prices may fall as many buyers stay on the sidelines at these high levels,” a Singapore-based rubber trader said. The yen strengthened, trading 0.4% higher at 153.55 a dollar. A weaker currency makes yen-denominated assets more affordable to overseas buyers. Oil prices ticked up in early trade, after falling in the previous session as investors took stock of a potential ceasefire between Israel and Hezbollah, weighing on oil’s risk premium.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Source: Brecorder
