TOKYO: Japanese rubber futures slipped on Thursday, as falling oil prices offset a rally in Asian stocks.
The Osaka Exchange (OSE) rubber contract for January delivery was down 0.9 yen, or 0.21 percent, at 425.1 yen (USD2.67) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 65 yuan, or 0.36 percent, to 17,875 yuan (USD2,649.99) per metric ton.
The most active September butadiene rubber contract on the SHFE rose 295 yuan, or 2.23 percent, to 13,540 yuan per metric ton.
Oil prices dipped on Thursday as investors assessed prospects for weaker global demand this year, though they were underpinned by a lack of major progress in talks over the blockaded Strait of Hormuz and disruptions to supply.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Asian stocks climbed on Thursday as tame US inflation data cooled expectations of a Federal Reserve rate hike next month, with the Nikkei climbing 1.6 percent to 68,605.51 by 0221 GMT.
With peak seasonality subsiding and El Niño-related concerns rising, the market may face supply constraints this year, particularly after summer holidays as factories return to normal production levels, said a Singapore-based trader.
Downstream tyre manufacturers remain in off-season maintenance, weighing on near-term demand, though replacement demand for all-steel tyres is entering its traditional peak season and tyre operating rates are expected to edge higher in August, analysts from Chinese broker GF Futures said in a note.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 220.5 US cents per kg, down 0.2 percent as of 0700 GMT.
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