Rubber futures rise on China economic recovery prospects

Tokyo - Natural rubber futures increased in the second week of January amid speculation of a sharp rebound in the Chinese economy during 2023.

Over the trading week ended 13 Jan, “strong new buying flows” were observed across all major rubber exchanges, said said Japan's JPX exchange in its weekly report issued 16 Jan.

The trend led to prices being lifted to a new high for recent months, said JPX, noting a Reuters’ poll that suggested a likely 4.9% economic rebound in China this year.

“All exchanges' weekly trading volume and open interest increased, which indicated new buying interests,” the Tokyo-based exchange commented.

Expectations of China’s economic recovery further supported rubber futures prices after the country eased Covid restrictions for citizens and foreign travelers earlier this month.

There was also buying-interest expectation ahead of China's long Lunar New Year holiday, 21-27 Jan.

In Japan, OSE's contracts for June delivery were up 1.3% in moderate trading volumes due to a national holiday.

According to JPX, while market sentiment seems steady, a strong Yen against the dollar may cap OSE's rubber futures prices for further rallies.

In Singapore, rubber contracts for April delivery closed 2.7% higher compared to the previous week at $139.8/100kg.