Japanese rubber futures rise on firmer oil

SHANGHAI: Japanese rubber futures rose on Monday, supported by surging oil prices, while steady tyre manufacturing rates in China also supported demand.

The Osaka Exchange (OSE) rubber contract for September delivery was up 3.9 yen, or 1.01percent, at 391.4 yen (USD2.46) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 470 yuan, or 2.83percent, to 17,080 yuan (USD2,504.69) per metric ton.

The most-active May butadiene rubber contract on the SHFE fell 45 yuan, or 0.28percent, to 15,935 yuan per ton. Oil prices jumped more than 5percent on fears that the ceasefire between the United States and Iran could collapse after the US seized an Iranian cargo ship, while traffic through the Strait of Hormuz stayed largely halted.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.1percent from last Friday, the exchange said on Friday. Demand for rubber remained firm in China, as the capacity utilisation rate from a sample of semi-steel and all-steel tyre manufacturers increased year-on-year, according to Chinese broker Longzhong Information.

Prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber were up 0.02 percent and 1.66percent, respectively. The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 205.2 US cents per kg, up 2 percent, as of 0704 GMT.