SINGAPORE: Japanese rubber futures rose on Monday, supported by a firmer dollar, even as recent gains prompted some investors to unwind positions.
The Osaka Exchange (OSE) rubber contract for January delivery was up 1.7 yen, or 0.54%, at 316.5 yen ($2.14) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 75 yuan, or 0.52%, to 14,365 yuan ($2,001.81) per metric ton.
The most active September butadiene rubber contract on the SHFE dipped 80 yuan, or 0.7%, to 11,395 yuan ($1,587.93) per metric ton.
The recent rally in rubber futures led to overbought conditions, resulting in investors unwinding long positions and triggering stop-loss orders, Japan Exchange Group said in a report on Monday.
Meanwhile, the dollar strengthened 0.2% to 147.67 yen. A weaker currency makes yen-denominated assets more affordable to overseas buyers.
Meanwhile, BYD’s production declined by 0.9% in July year-on-year, ending a 16-month growth streak, though the world’s largest electric vehicle maker saw sales and production continue to rise year-on-year in July.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
Elsewhere, oil prices edged up after earlier losses as OPEC+ announced another large production hike in September.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Japan’s Nikkei fell 1.4%, weighed by Friday’s rebound in the yen.
Top rubber producer Thailand’s meteorological agency forecasted less rain from August 5-10.
The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 164.7 US cents per kg, up 0.2%.
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