Weak Yen Drives Rubber Prices Higher on Osaka Exchange
Rubber prices on the Osaka Exchange (OSE) saw their biggest weekly rise since the week ended April 3rd, despite a relatively small move on Friday.
The main driver behind this increase wasn't a surge in tire demand, but rather a weaker yen making yen-priced contracts look stronger. As the yen slipped to around 158.82 per US dollar, the same underlying value of rubber could translate into a higher number in yen.
On the OSE, the March rubber contract hovered around 451.9 yen per kilogram, up about 5.04% for the week. However, industry tracker Qinrex reported declines in both semi-steel and all-steel tire production for the week to September 24.
Everbright Futures, a Chinese futures brokerage, noted that tire demand was coming in below expectations, suggesting a soft demand backdrop heading into China's long holiday. With the Shanghai Futures Exchange closed until Monday, September 28, thinner liquidity can exaggerate short-term price gaps between Osaka, Singapore, and China.