SINGAPORE: Japanese rubber futures fell for a fourth straight session to a monthly low on Monday amid lower oil prices and the restarting of tapping activities in rubber producing regions.
The Osaka Exchange (OSE) rubber contract for September delivery closed down 2.1 yen, or 0.67%, at 313.6 yen ($2.04) per kg, the lowest close since March 11. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 5 yuan, or 0.03%, to finish at 14,710 yuan ($2,032.16) per metric ton.
Oil prices fell as market participants dialled back risk premiums following Iran’s attack on Israel late on Saturday which the Israeli government said caused limited damage.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. China’s meteorological agency said Yunnan, a key rubber producing region, is set to receive higher rainfall this week after having experienced prolonged dry weather.
The commencement of rubber tapping in Yunnan and Hainan have contributed to declining raw latex prices in Thailand, triggering bearish sentiments in the market, China-based consultancy Longzhong said in a report on Monday, adding that the lack of new orders has led to downstream firms restocking rubber in small quantities at low prices.
Japan’s benchmark Nikkei average closed 0.74% lower. The yen’s slide against the dollar to a fresh 34-year low has revived anticipation of currency intervention. Rubber inventories in warehouses monitored by the SHFE fell 0.2% from April 3, the exchange said on Friday.
The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 163.2 US cents per kg, up 0.37%.
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