SINGAPORE: Japanese rubber futures weakened for a fourth straight session on Monday, hitting their lowest in more than a month, as seasonal harvesting firmed supply prospects.
The Osaka Exchange (OSE) rubber contract for November delivery ended daytime trade 4.1 yen lower, or 1.39%, to 290.9 yen ($2.03) per kg. Earlier in the session, prices fell to 290.2 yen, the lowest since April 30. Global rubber futures ended last week sharply lower with the return of full production from the northern hemisphere following the end of the wintering season, Japan Exchange Group said in a report on Monday.
Rubber crops usually undergo a season of low production from February to May before a peak harvesting period that lasts until September. Still, production in Yunnan has been reduced in the short term due to rainfall, though it is expected to return to normal in June, Chinese financial information site Tonghuashun Information said.
Heavy rainfall has triggered flash floods and mudslides, damaged roads and destroyed buildings and bridges, wreaking havoc in China’s southwestern Yunnan province over the long holiday weekend. On Friday, US President Donald Trump accused China of violating a bilateral deal to roll back tariffs and announced a doubling of worldwide steel and aluminium tariffs to 50%, once again rattling international trade.
Meanwhile, global auto executives are sounding the alarm on an impending shortage of rare-earth magnets from China, which could force the closure of car factories within weeks and influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
The front-month rubber contract on the Singapore Exchange’s SICOM platform for June delivery last traded at 157.1 US cents per kg, down 2.2%. China’s financial markets are closed on Monday for a public holiday. Trading will resume on Tuesday, June 3.
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