SINGAPORE: Japanese rubber futures rallied for a fourth consecutive session on Tuesday, buoyed by stronger oil prices and adverse weather threatening supplies in top producer Thailand.
The June Osaka Exchange (OSE) rubber contract closed up 7.6 yen, or 2.06%, at 376.2 yen ($2.39) per kg, its highest since Jan 6. The March rubber contract on the Shanghai Futures Exchange (SHFE) rose 305 yuan, or 1.79%, to 17,360 yuan ($2,368.16) per metric ton.
The most active February butadiene rubber contract on the SHFE gained 225 yuan, or 1.6%, to end at 14,330 yuan ($1,943.30) per ton. Oil prices eased but remained near four-month highs as the impact of fresh US sanctions on Russian oil remained the market’s key focus. The new sanctions have had a profound impact on the market, which remains concerned about increased supply risks, Chinese commodities data provider Longzhong Information said in a note.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Meanwhile, the Bank of Japan will debate whether to raise interest rates next week, Deputy Governor Ryozo Himino said. The yen was flat at 157.55 per dollar, inching away from the near six-month low it touched last week, with markets pricing in 57% chance of a hike.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. The northeast monsoon prevailing over Thailand’s gulf and southern region will strengthen with thunder-showers and isolated heavy rains from Jan. 16-19, according to the country’s meteorological agency’s website. The February front-month rubber contract on the Singapore Exchange’s SICOM platform last traded at 193.6 US cents per kg, up 1.2%.
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