Japanese rubber futures rose for a fourth consecutive session on Monday, tracking gains in the Shanghai market, while stronger crude prices lent some support.
Osaka Exchange’s rubber contract for October delivery finished 0.4 yen, or 0.2%, higher at 213.6 yen ($1.59) per kg, reversing losses earlier in the session. The OSE was closed from Wednesday to Friday for a series of public holidays in Japan. The rubber contract on the Shanghai futures exchange for September delivery rose 350 yuan to finish at 12,070 yuan ($1,745) per tonne.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.4% from last Friday, the exchange said. Japan’s benchmark Nikkei average closed down 0.71%. “It would be wise to keep an eye on the weather conditions in top exporter Thailand, as recent heatwaves and forecasted droughts might pose supply concerns in the coming months,” said a Singapore-based trader.
Oil prices rose on Monday as fears of a recession in the US, which drove prices down for three straight weeks for the first time since November, started receding. Higher oil prices disincentivise manufacturers from shifting to synthetic rubber, which is derived from oil, helping the natural rubber market.
The International Monetary Fund on Thursday warned of “uncertainty” around the direction of Japan’s monetary policy, saying a possible shift from ultra-low interest rates could have a significant impact on global financial markets. Asian shares were mostly higher on Monday as investors braced for a week where US inflation data will test wagers that the next move in interest rates will be down, while worries about a possible credit crunch weighed on the dollar.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 139.4 US cents per kg, up 2.5%.
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