SINGAPORE: Japanese rubber futures recorded their largest dip in seven months on Friday as investors booked profits after a recent price rally.
The Osaka Exchange (OSE) rubber contract for March delivery was down 6.4 yen, or 2.4%, at 259.8 yen ($1.73) per kg at closing.
The benchmark contract recorded gains of 1.1% this week, its second consecutive weekly rise. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery was down 275 yuan, or 1.9%, at 14,440 yuan ($1,973.24) per metric ton.
“Correction in futures prices is because fundamentally there has been no change in demand appetite. Some would also choose to take profit given the global events and uncertainty,” said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company. The yen last traded at 149.85 per dollar, not far from the psychological threshold of 150 per dollar which some traders bet could trigger an intervention from Japanese authorities, as happened last year.
“However, the wet weather in Thailand and Vietnam has caused a continued rise in raw material prices and several sellers have conveniently also delayed shipments,” Farah added.
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 0.54%.
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