SINGAPORE: Japanese rubber futures rose for a second straight session on Thursday, tracking the Nikkei upwards, while weather concerns in Thailand softened supply prospects.
The Osaka Exchange (OSE) rubber contract for December delivery ended daytime trade 1.9 yen higher, or 0.63%, at 301.7 yen ($2.09) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 290 yuan, or 2.11%, to 14,040 yuan ($1,958.95) per metric ton. The most active July butadiene rubber contract on the SHFE increased 130 yuan, or 1.17%, to 11,195 yuan ($1,562.00) per metric ton.
Japan’s Nikkei rose 1.5% to its highest since January. Still, the dollar fell 0.4% on the yen to 144.57 per dollar. A stronger currency makes yen-denominated assets less affordable to overseas buyers. In top producer Thailand, the country’s meteorological agency warned of heavy rains and floods from June 24-27.
Oil prices rose slightly, extending gains from Wednesday as investors kept an eye on the ceasefire between Israel and Iran. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Hainan, a major rubber producing region in China, was hit by a tropical depression early on the day. This will bring more rain to a region still reeling from Typhoon Wutip two weeks ago, said the country’s National Meteorological Centre.