SINGAPORE: Japanese rubber futures rose more than 2% on Monday amid higher oil prices and supply concerns. The Osaka Exchange (OSE) rubber contract for October delivery ended up 6.9 yen, or 2.14%, at 328.9 yen ($2.11) per kg, the highest close since April 10.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 180 yuan to finish at 14,865 yuan ($2,055.99) per metric ton.

Oil extended gains amid political uncertainty in major producing countries after Iran’s president died in a helicopter crash and the Saudi crown prince cancelled a Japan trip.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Tight supply is likely to persist in the short term as large-scale tapping takes time to occur, China-based consultancy Longzhong said in a note on Monday, adding that faster-than-expected depletion of rubber inventories in China is also supporting prices.

Top producer Thailand’s benchmark export-grade smoked rubber sheet (RSS3) hit 86.94 baht per kg on Monday, 1.29% higher than Friday. “The weaker JPY and speculative buying interest are expected to keep prices (of the OSE October contract) firm over the next couple of weeks,” Japan Exchange Group said in a strategy report published Monday. The yen weakened 0.05% to 155.75 against the dollar. A weaker currency makes yen-denominated assets more affordable to overseas buyers.

China announced “historic” steps on Friday to stabilise its crisis-hit property sector, with the central bank facilitating 1 trillion yuan ($138 billion) in extra funding and easing mortgage rules, and local governments set to buy “some” apartments. The front-month rubber contract on the Singapore Exchange’s SICOM platform for June delivery last traded at 169.9 US cents per kg, up 0.83%.