SHANGHAI: Japanese rubber futures edged lower on Tuesday, weighed down by profit-taking after last week’s rally and falling tyre demand as Chinese manufacturers halted production for scheduled inspections and the upcoming holidays.
The Osaka Exchange rubber contract for March delivery was down 0.9 yen, or 0.2percent, at 444.1 yen (USD2.82) per kg. The rubber contract on the Shanghai Futures Exchange for January delivery fell 445 yuan, or 2.29percent, to 19,010 yuan (USD2,835.41) per metric ton. The most active November butadiene rubber contract on the SHFE lost 65 yuan, or 0.42percent, to 15,460 yuan per ton.
The market is undergoing a correction after an unusually rapid rise, bringing prices back to a more normal level, a Singapore-based trader said. Chinese tyre manufacturers extended production halts beyond scheduled inspections into an extended holiday shutdown in mid-to late September, as persistent losses curbed output, analysts from broker Everbright Futures said in a note.
Rising oil prices, however, limited losses. Oil prices rose for a second successive session as lingering concern over Middle East supply disruption brought about by the US-Israeli war on Iran outweighed signs of recovering crude exports from the region. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange’s SICOM platform for December delivery last traded at 243.8 US cents per kg, down 1.3 percent as of 0700 GMT.
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