SINGAPORE: Japanese rubber futures fell to their lowest in almost two months, weighed down by improving weather conditions in top producer Thailand, although stronger synthetic rubber prices limited the drop.
The Osaka Exchange (OSE) June rubber contract closed down 4.9 yen, or 1.36%, at 354.4 yen ($2.25) per kg.
The March rubber contract on the Shanghai Futures Exchange (SHFE) fell 170 yuan, or 1.01%, to 16,630 yuan ($2,270.34) per metric ton.
“This week’s drop seemed to be a continuation of China stocks’ weak opening last week bleeding in to other markets, including rubber futures,” said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies.
Thai raw material prices are improving, so expectations of more supply also kept a lid on prices, Miller added.
China’s stock exchanges and central bank rushed to defend falling stock markets on Monday, trying to soothe investors concerned about Donald Trump’s return to the White House and Beijing’s ability to revive the economy.
The Qingdao port has quickly accumulated inventory, while downstream demand is off-season, Chinese rubber trading portal Natural Rubber Network said in a note.
The northeast monsoon in Thailand is weakening with less rains and isolated thundershowers in the South, said the country’s meteorological agency on their website.
The most active February butadiene rubber contract on the SHFE rose 360 yuan, or 2.69%, to 13,725 yuan
($1,873.75)per metric ton, cushioning the fall since synthetic rubber competes with natural rubber.
The dollar gained 0.14% to reach 157.83 yen, and earlier rose as high as 158.425 yen for the first time since July 17, drawing support from higher US Treasury yields.
A stronger currency makes yen-denominated assets less affordable to overseas buyers.
The front-month February rubber contract on Singapore Exchange’s SICOM platform last traded at 183.5 US cents per kg, down 1%.
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