SINGAPORE: Japanese rubber futures ended daytime trade lower as a stronger dollar weighed on prices, though losses were cushioned by supply concerns after Typhoon Kajiki brought heavy rains to key producing regions.
The Osaka Exchange (OSE) rubber contract for January delivery fell 5.5 yen, or 1.7 percent, to 317.5 yen (USD2.16). The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery dipped 215 yuan, or 1.35 percent, to 15,760 yuan (USD2,203.30) per metric ton. The most active October butadiene rubber contract on the SHFE fell 270 yuan, or 2.25 percent, to 11,710 yuan per ton.
The dollar regained some ground, rising 0.33 percent against the yen to 147.93, following US President Donald Trump’s decision to fire Federal Reserve Governor Lisa Cook, eroding investors’ trust in the greenback’s dominance. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Still, torrential rains from Typhoon Kajiki sweeping through the main rubber producing areas of Southeast Asia may lead to a slow increase in new rubber production, said Chinese rubber sales portal Natural Rubber Network.
Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from August 27 to September 2.
Meanwhile, oil prices were little changed after falling in the previous session as the market awaited the impact of US tariffs on India for its purchase of Russian supply.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
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