SINGAPORE: Japanese rubber futures rose on Friday, tracking gains in the Shanghai market and on expectation that stronger crude oil prices may encourage a switch to natural rubber from synthetic rubber which is produced from oil.
The Osaka Exchange rubber contract for January delivery was up 1.4 yen, or 0.6%, at 241.4 yen ($1.80) per kg, as of 0200 GMT. The benchmark has risen more than 2% this week, heading for its first weekly increase in four.
The rubber contract on the Shanghai futures exchange for September delivery was up 140 yuan, or 1.2%, at 12,275 yuan ($1,819.27) per tonne.
Japan’s benchmark Nikkei average was up 0.36%. * Oil prices gained about $1 in early trade, lifted by supply concerns and a weaker US dollar.
The natural rubber market benefits from stronger oil prices as manufacturers are incentivised towards shifting away from synthetic rubber, which is derived from oil, thus driving natural rubber prices higher.
Japan’s factories ramped up output at the fastest pace in more than nine years in June, including a 14.0% month-on-month rebound in car production, as disruptions due to China’s Covid-19 curbs eased.
Mainland China’s Health Commission reported 564 new coronavirus cases for July 28, compared with 626 new cases a day earlier.
Asian stocks took their cue on Friday from a late rally on Wall Street, as markets focused on a possible slowdown in the pace of rate hikes rather than a US recession after data showed its economy shrinking for a second straight quarter.
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