TOKYO: Japanese rubber futures fell on Friday, pressured by a pullback in synthetic butadiene rubber prices that ended a 10-session rally, even as raw material costs remained broadly stable.
The Osaka Exchange (OSE) rubber contract for December delivery was down 2.4 yen, or 0.56%, at 424.7 yen ($2.61) per kg, as of 0150 GMT.
The contract has gained 1.17% so far this week.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery dropped 240 yuan, or 1.41%, to 16,810 yuan ($2,482.06) per metric ton.
The most active September butadiene rubber contract on the SHFE fell 165 yuan, or 1.2%, to 13,595 yuan per metric ton, its first decline in 10 sessions.
Natural rubber’s decline was largely a function of butadiene rubber’s retreat, rather than a shift in its own fundamentals, with raw material costs for butadiene little changed even as its futures had climbed sharply in recent sessions, said a Singapore-based trader.
Butadiene’s rally through the week had been driven more by escalating U.S.-Iran tensions pushing up costs along the crude-to-butadiene chain than by a shift in demand, analysts from Chinese broker Tianfeng Futures said in a note.
The move was event- and cost-driven rather than a trend reversal, with a risk of profit-taking once geopolitical tensions ease, cautioned the analysts.
Oil prices inched higher on Friday after the U.S. and Iran stepped up attacks across the Gulf, with their broken truce limiting oil flows out of the Strait of Hormuz and with Tehran asking the Houthi movement to stand ready to shut the Red Sea export route.
The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery was flat at 216 U.S. cents per kg.
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