SINGAPORE: Japanese rubber futures extended gains to close at a two-week high on Tuesday, supported by supply disruptions in rubber-producing regions and higher oil prices.
The Osaka Exchange (OSE) rubber contract for September delivery closed up 7.5 yen, or 2.3%, at 333 yen ($2.19) per kg, its highest close since March 22.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 365 yuan to finish at 15,140 yuan ($2,092.95) per metric ton.
“Harvesting in Thailand and Malaysia will be hindered for at least 10 days as migrant Indonesian workers usually return to their home country for celebrating Eid al-Fitr along with their families,” said Jom Jacob, co-founder of India-based analysis firm What Next Rubber.
High temperatures and drought in Yunnan are causing rubber trees leaves to yellow and harvesting to be halted, China-based consultancy Zhuochuang said in a report on Tuesday.
Oil prices rose after hopes diminished that negotiations between Israel and Hamas would lead to a ceasefire in Gaza and ease tensions in the Middle East.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Japan’s benchmark Nikkei average closed 1.08% higher.
The Japanese yen weakened 0.07% to 151.90 against the dollar. A weaker currency makes yen-denominated assets more affordable to overseas buyers.
India’s top carmaker Maruti Suzuki has added an assembly line at its largest plant, boosting its annual capacity to 900,000.
The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 168.3 U.S. cents per kg, up 1.45%.
Singapore financial markets are closed on Wednesday for a market holiday and will resume trading on Thursday, April 11.
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