SINGAPORE: Japanese rubber futures rose for a fifth session on Tuesday to log their longest winning streak in over two months, as stronger raw material prices boosted buying interest from funds.

The Osaka Exchange (OSE) rubber contract for November delivery closed up 5.2 yen, or 1.56%, at 338.6 yen ($2.16) per kg to mark its longest rally since mid-March. It rose as much as 3.06%, or 343.6 yen, earlier in the session.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 185 yuan to finish at 15,175 yuan ($2,094.06) per metric ton.

Funds are “in the market” on Tuesday given rising raw material prices, pushing futures prices higher amid increased buying interest from funds, a Singapore-based trader said.

Raw material prices in top producer Thailand surged on Tuesday morning, with factories eagerly bidding 2-3 baht above market price, another Singapore-based trader said.

Rising prices of cup-lump rubber, a form of raw material, due to unusually low market arrivals have contributed to higher prices of technically specified rubber (TSR), said Jom Jacob, chief analyst at India-based analysis firm What Next Rubber.

The current “abnormal increases” in cup-lump prices may incentivise a section of farmers to switch from producing RSS (ribbed smoked sheet) to cup-lump, Jacob added. “The resultant short supply can potentially accelerate RSS prices.”

Cup-lump is a latex coagulate used in producing TSR, while RSS is often directly made from fresh latex.

Prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber (STR20) rose 1.62% and 0.74% respectively on Tuesday.

The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 177 US cents per kg, up 1.26%. It surged to 181.50 cents earlier in the session, the highest intraday price since March 2022.