Japanese rubber up

SINGAPORE: Japanese rubber futures rose on Friday and posted their fourth straight weekly gain, as floods in top producer Thailand disrupted supply.

The Osaka Exchange (OSE) rubber contract for May delivery was up 5.9 yen, or 1.75 percent, at 342.9 yen (USD2.19) per kg. The contract ended the week up 2.27 percent.

The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 185 yuan, or 1.22percent, to 15,410 yuan (USD2,177.23) per metric ton.

The most-active January butadiene rubber contract on the SHFE gained 65 yuan, or 0.63 percent, to 10,415 yuan per ton. Severe floods in southern Thailand could cut rubber output in the world’s largest producer by as much as 90,000 metric tons, worth 4.5 billion baht (USD140 million), according to the national rubber authority. Oil prices increased on Friday as investors kept an eye on Russia-Ukraine peace talks and the outcome of the OPEC+ meeting on Sunday.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Dutch chipmaker Nexperia urged its Chinese units to help restore normal production, after its supply chain was broken up when the Dutch government took over the company in September.

Supply disruptions stemming from the Nexperia case have prompted major automakers worldwide to sound the alarm, with some warning of potential production shutdowns if the crisis persists. Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.

The front-month rubber contract on Singapore Exchange’s SICOM platform for December delivery last traded at 174 US cents per kg, down 1.7 percent.

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