SHANGHAI: Japanese rubber futures slid from a nine-month high on Tuesday, snapping a nine-session rally of continuous gains as the yen strengthened against the greenback and oil prices fell.
The Osaka Exchange (OSE) rubber contract for June delivery fell 0.2 percent to 349.2 yen (USD2.23) per kg, after climbing earlier in the session to 351.1 yen, its highest level since March.
The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery rose 250 yuan, or 1.58 percent, to 16,050 yuan (USD2,299.79) per metric ton. The most-active February butadiene rubber contract on the SHFE rose 140 yuan, or 1.2 percent, to 11,830 yuan per ton.
Oil prices fell on expectations of ample global supply amid weak demand, and as the market weighed the prospect of higher Venezuelan crude output, following the US capture of President Nicolas Maduro. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The US dollar retreated for a second day in Asian trading on Tuesday, as market jitters from US military action in Venezuela eased and dovish comments from Fed officials spurred risk-taking on Wall Street. Against the yen the US dollar was off 0.1 percent at 156.255 yen. A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers.
Top rubber producer Thailand’s meteorological agency warned of isolated and heavy thunderstorms from January 6-9 in the South, where rubber production is concentrated. However, rains are set to ease from January 10-11.