Japan rubber futures drift on higher Southeast Asia supply, weaker oil

TOKYO: Japanese rubber futures fell for a second consecutive session on Friday, as rising natural rubber output across major global producing regions and weaker oil prices continued to drag on sentiment, outweighing weather disruptions that could hamper Thai supply.

Here are some more details: The Osaka Exchange (OSE) rubber contract for December delivery was down 7 yen, or 1.65%, at 416 yen ($2.57) per kg as of 0200 GMT.

The contract has lost 5.58% so far this week.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery slid 375 yuan, or 2.21%, to 16,600 yuan ($2,442.58) per metric ton.

The most active September butadiene rubber contract on the SHFE fell 25 yuan, or 0.21%, to 12,130 yuan per metric ton.

Major global natural rubber producing regions, including Indonesia and Vietnam, are currently in their seasonal production increase cycle, with improved weather conditions accelerating the release of new rubber and tapping operations, said several analysts from Chinese brokerages on Wechat.

Simultaneously, synthetic rubber plant operating rates have been rising, with output continuously increasing.

Oil prices fell on Friday morning and are heading for steep weekly losses amid easing supply concerns as more stranded oil tankers exited the Strait of Hormuz, even though a cargo vessel was hit near Oman on Thursday.

Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.

However, weather disruptions in Thailand could curb downsides.

Top rubber producer Thailand’s meteorological agency warned of intense rains from June 25 to July 1, which could disrupt tapping activity.