SHANGHAI: Japanese rubber futures fell for a third straight session on Tuesday in range-bound trading, with a further decline in oil prices weighing on the market. The Osaka Exchange (OSE) rubber contract for January delivery was down 0.9 yen, or 0.22percent, at 416.1 yen (USD2.54) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery was flat at 16,710 yuan (USD2,469.08) per metric ton. The most active September butadiene rubber contract on the SHFE shed 505 yuan, or 3.78percent, to 12,860 yuan per ton.
Oil prices edged lower on Tuesday, hovering around one-week lows amid hopes for a resolution in the US-Iran war, while subdued flow through the Strait of Hormuz and further supply disruption risks underpinned the market.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The geopolitical risk premium that had driven butadiene’s rally has been unwinding as the ceasefire eases cost support, analysts at Chinese broker Galaxy Futures said.
Prices have stayed largely range-bound in recent sessions, with the OSE contract confined to narrow trading levels last week even as crude oil rose on escalating Middle East tensions, Japan Exchange Group said in a report on Monday.
Japan’s Nikkei share average fell more than 4percent on Tuesday to its lowest in two months, as chip-related stocks followed their US peers lower amid caution ahead of big tech earnings.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 213.7 US cents per kg, down 0.4percent as of 0700 GMT.
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