TOKYO: Japanese rubber futures slipped on Thursday, pressured by increased Thai front-month shipments to China, with a stronger dollar and weaker oil prices adding to the decline.
The Osaka Exchange (OSE) rubber contract for December delivery was down 18.2 yen, or 4.13 percent, at 423 yen (USD2.61) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 940 yuan, or 5.33 percent, to 16,685 yuan (USD2,451.80) per metric ton.
The most active September butadiene rubber contract on the SHFE slipped 690 yuan, or 5.42 percent, to 12,035 yuan per metric ton.
Top producer Thailand is offering 8,000 metric tons of front-month cargoes for delivery to China, after previously withholding supply to the world’s top rubber consumer for some time, a rubber trader told Reuters on condition of anonymity.
Speculators interpreted the supply increase as a bearish signal, pushing prices lower.
Selling was reinforced by a broad-based decline in the commodities index and a stronger US dollar, said another Singapore-based trader.
The dollar index, which measures the currency against a basket of six major peers, touched a 13-month peak of 101.8 on Wednesday and traded around 101.5 on Thursday.
This makes dollar-denominated commodity imports more expensive for buyers holding other currencies and typically weighs on raw material prices across the board.
Oil prices extended their decline on Thursday to near levels last seen before the start of the Iran war, as expectations of rising supply from the Middle East outweighed demand concerns.
The front-month rubber contract on Singapore Exchange’s SICOM platform for July delivery last traded at 207.5 US cents per kg, down 6.9 percent, as of 0703 GMT.
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