SINGAPORE: Japanese rubber futures snapped an eight-session winning streak on Thursday as investors booked profit, although strong economic data in China and supply concerns limited losses.
The Osaka Exchange (OSE) rubber contract for March delivery was down 2.3 yen or 0.9% at 266.2 yen per kg at closing. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery was down 40 yuan, or 0.2%, at 14,690 yuan per metric ton.
“Following a significant rally, some speculators are securing profits, anticipating a potential near-term market downturn, driven partly by a decrease in synthetic rubber prices in Shanghai,” said a Singapore-based trader. China’s economy grew at a faster-than-expected clip in the third quarter, while consumption and industrial activity in September also surprised on the upside, suggesting the recent flurry of policy measures is helping bolster a tentative recovery.
The Thai Metrological Department has warned of severe conditions, with gusty winds, heavy-to-very heavy rains and accumulations that may cause flash floods and overflows, potentially affecting supply. Japan’s benchmark Nikkei average closed down 1.91%. Oil prices fell on Thursday, reversing gains in the previous session, after OPEC showed no signs of supporting Iran’s call for an oil embargo on Israel and as the United States plans to ease Venezuela sanctions to allow more oil to flow globally.
Natural rubber often takes direction from oil prices, as it competes for market share with synthetic rubber, which is made from crude oil. Asian shares slid on Thursday as risk aversion prevailed due to mounting worries over Middle East conflict, while the bond sell-off intensified, taking Treasury yields to fresh 16-year highs ahead of a keenly awaited speech from Fed Chair Jerome Powell.
The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 147.7 US cents per kg, down 0.7%.