SHANGHAI: Japanese rubber futures fell for a fifth straight session on Tuesday, weighed down by softening tyre demand in China and a technical correction after prices failed to break recent highs, even as oil prices climbed.
The Osaka Exchange (OSE) rubber contract for February delivery was down 5.9 yen, or 1.38percent, at 420.6 yen (USD2.72) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 330 yuan, or 1.73percent, to 18,720 yuan (USD2,788.74) per metric ton. The most active October butadiene rubber contract on the SHFE plunged 565 yuan, or 3.72percent, to 14,610 yuan per metric ton.
Operating rates at downstream tyre makers have weakened as profitability is squeezed, with further declines expected next week as some companies plan holiday closures ahead of China’s National Day and Mid-Autumn Festival, analysts from broker Huatai Futures said in a note.
Natural rubber futures failed to break through previous highs this week and have entered a short-term technical correction, with support from agriculture-linked bullish factors also fading, broker Gelin Dahua Futures said in a note.
Losses were limited, however, by rising oil prices. Oil prices rose nearly 2percent on Tuesday as concerns over supply disruptions lingered after attacks on Saudi Arabian energy infrastructure left the kingdom’s East-West pipeline offline and cast doubt on efforts to ease shipping risks in the Gulf.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 233.7 US cents per kg, down 1.4percent as of 0700 GMT.
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