SINGAPORE: Japanese rubber futures snapped a 10-day winning streak on Thursday, as market uncertainty surrounding China-U.S. trade relations weighed on sentiment, while seasonal supply prospects also pressured prices.
The Osaka Exchange (OSE) rubber contract for October delivery ended daytime trade 2.9 yen lower, or 0.91%, at 316.7 yen ($2.18) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery eased 65 yuan, or 0.43%, to 15,090 yuan ($2,093.80) per metric ton.
The most active June butadiene rubber contract on the SHFE fell 40 yuan, or 0.33%, to 12,260 yuan ($1,701.12) per metric ton.
Prices were strongly elevated due to the pause in U.S.-China tariffs, and Thursday’s decline is likely due to profit-booking as fundamental demand still looks muted, said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies.
On Monday, the U.S. and China agreed to pause tariffs for at least 90 days.
Japanese rubber futures extend gains
A pullback in rubber prices on Thursday reflects market uncertainty, as investors are unsure how policies will evolve after the 90-day truce, said Chinese financial information site Tonghuashun Information.
“Furthermore, as most production areas come out of wintering, this could provide some pressure on prices too,” Miller added.
Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September.
Moreover, Japan’s Nikkei share average dropped for a second day on Thursday as a stronger yen sent automaker shares sliding.
Toyota and Honda each tumbled 3.2%, and Nissan slumped 3.4%, dampening sentiment for the tyre-making material.
The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 175.6 U.S. cents per kg, down 0.9%.
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