SHANGHAI: Japanese rubber futures fell on Friday, with butadiene rubber declining more than 3.5percent as crude oil prices slipped, adding pressure on natural rubber.
The Osaka Exchange (OSE) rubber contract for June delivery shed 2 yen, or 0.56 percent, to 352.1 yen (USD2.22) per kg. Still, the contract logged a sixth straight weekly gain, rising 1.29percent from last week.
The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery eased 195 yuan, or 1.22 percent, to 15,835 yuan (USD2,272.43) per metric ton. The most active March butadiene rubber contract on the SHFE fell 435 yuan, or 3.55 percent, to 11,815 yuan per metric ton. Oil prices fell in Asian trade, extending losses from Thursday, as concerns about supply risks eased after the likelihood of a US strike on Iran receded.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. However, a squeeze in supply due to weather woes in top rubber producer Thailand might curb downside in prices.
The country’s meteorological agency warned of isolated thunderstorms in the South, where rubber production is typically concentrated, from January 15-19. The moderate northeast monsoon prevailing over the South will strengthen from January 20-21, the agency added.
In second-largest producer Indonesia, monsoons over rubber-producing regions Kalimantan and Sumatra also tightened supply, the Indonesian Agency for Meteorological, Clima-tological and Geophysics (BMKG) said. “With limited availability, processors across Thailand, Vietnam, Africa and Indonesia remain cautious in their selling,” an analyst told Reuters, which supported rubber prices over the past few weeks. The front-month rubber contract on the Singapore Exchange’s SICOM platform for February delivery last traded at 181.4percent US cents per kg, down 0.7 percent as of 0723 GMT.
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