SINGAPORE: Japanese rubber futures fell 6% on Friday in their biggest drop in more than three years, as prices corrected following a sharp rally last week, while weaker crude oil and easing supply shortage fears also weighed.

The Osaka Exchange (OSE) rubber contract for August delivery closed down 21.5 yen, or 6.16%, at 327.8 yen ($2.16) per kg, posting its steepest fall since Dec. 23, 2020. It fell 6.87% this week, shedding some of the previous week’s 12.46% gain. The rubber contract on the Shanghai Futures Exchange for May delivery tumbled 695 yuan, or 4.57%, to 14,510 yuan ($2,007.89) per metric ton following sharp gains at the start of the week.

“The sell-off yesterday and today is likely due to profit-taking before the weekend,” said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.

Big swings in the futures market this week kept several tyre manufacturers sidelined, Miller added. Rubber had been trading on speculation on stockpile rotation and high raw material prices, a Singapore-based trader said.