Japanese rubber futures firm on weather risks
The Osaka Exchange rubber contract for December delivery ended daytime trade up 1.2 yen, or 0.36%, at 330.7 yen ($2.26) per kg. The rubber contract on the Shanghai Futures Exchange for September delivery rose 230 yuan, or 1.53%, to 15,245 yuan($2,131.63) per metric ton.
The most active August butadiene rubber contract on the SHFE gained 285 yuan, or 2.38%, to 12,285 yuan ($1,717.75) per metric ton.
Adverse weather and the condition of rubber plantations in Southeast Asia could lead to lower rubber output, even as demand prospects in China are strengthening, said Chinese rubber sales portal Natural Rubber Network.
Top rubber producer Thailand's meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows on July 24.
Meanwhile, new car sales in Europe dropped over 5% in June, as European auto makers faced competition from China, 25% import tariffs imposed by the US, and local regulations pushing for a faster shift to electric vehicles.
Despite the impact of tariffs, UK vehicle production is expected to reverse its decline the next year, buoyed by a new trade deal with the US that reduced taxes on British car exports.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres. Elsewhere, oil prices rose, bolstered by positive sentiment over US trade negotiations.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange's SICOM platform for August delivery last traded at 173.7 US cents per kg, up 2.5%.
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