SHANGHAI: Japanese rubber futures fell on Monday, extending the previous session’s decline on lower oil prices and improved weather in rubber-producing regions that is supporting a recovery in output. The Osaka Exchange (OSE) rubber contract for April delivery as down 4.9 yen, or 1.16 percent, at 419.2 yen (USD2.65) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 45 yuan, or 0.24 percent, to 18,665 yuan (USD2,796.59) per metric ton.
The most active December butadiene rubber contract on the SHFE gained 225 yuan, or 1.45 percent, to 15,750 yuan per metric ton. The prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber were down 0.59 percent and 1.22 percent, respectively.
Oil prices fell on Monday after US President Donald Trump downplayed the likelihood of new strikes on Iran, though attacks on ships near the Strait of Hormuz kept supply concerns in focus. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Improved weather, including showers across major producing regions, is supporting a recovery in rubber output in Thailand and other ASEAN countries, Japan Exchange Group (JPX) said in a report on Monday * Weaker global equities, the prospect of higher interest rates and a sharp fall in crude oil prices also weighed on market sentiment, JPX added.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 4.6 percent week-on-week, the exchange said on Friday. The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 237.8 US cents per kg, up 0.3 percent as of 0705 GMT.
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