Japan rubber futures set for weekly gain fuelled by rise in oil prices
Japanese rubber futures climbed on Friday and were on track for a weekly gain, supported by a rise in oil prices and a rally in the Nikkei, which helped outweigh concerns about a potential rise in supply from top producer Thailand.
The Osaka Exchange (OSE) rubber contract for December delivery ended morning trade up 5 yen, or 1.66%, at 306.7 yen ($2.13) per kg.
The contract has gained 3.76% so far this week.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 220 yuan, or 1.58%, to 14,105 yuan ($1,966.84) per metric ton.
The most active July butadiene rubber contract on the SHFE climbed 155 yuan, or 1.4%, to 11,245 yuan per metric ton.
Japan's Nikkei climbed 1.5% on Thursday, surpassing the 40,000 mark for the first time since January 27.
Oil prices rose despite concerns over Mideast supply risks easing due to increased fuel demand in the U.S.
Natural rubber often takes direction from oil as it competes for market share with synthetic rubber, which is made from crude oil.
Japan rubber futures extend rise on Nikkei gain, supply concerns
Still, Chinese factories are preparing to pilot direct purchases of 300 tons of rubber from Thai farmers under an agreement that would cut tariffs from 20% to zero, Chinese commodities data provider Longzhong Information said.
Thailand's meteorological agency warned of heavy rains and floods from June 24-27.
In top consumer China, automakers are expanding into Africa, viewing it as an important market for global growth with significant long-term potential.
Vehicle sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
The front-month rubber contract on the Singapore Exchange's SICOM platform for July delivery last traded at 160.8 U.S. cents per kg, down 1.3%.
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