SHANGHAI: Japanese rubber futures fell for the second straight session on Friday, pressured by rising tyre stockpiles in top consumer China and slowing tyre production.
The Osaka Exchange (OSE) rubber contract for June delivery closed 2.9 yen, or 0.83 percent, lower at 347.6 yen (USD2.21) per kg. The contract rose 0.61 percent this week in its fifth straight weekly gain.
The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 155 yuan, or 0.96 percent, to 16,030 yuan (USD2,296.07) per metric ton. The most-active February butadiene rubber contract on the SHFE fell 260 yuan, or 2.12 percent, to 12,015 yuan per ton. Manufacturers in China’s largest tyre production province Shandong saw an increase in tyre inventories, said Chinese financial information platform quheqihuo.
Factories on average held 44.62 days of inventory for all-steel radial tyres and 47.36 days of inventory for semi-steel radial tyres, a week-on-week increase of 0.77 percent days and 0.66percent respectively, quheqihuo said.
Steel-tyre manufacturers in China have also slowed production due to planned maintenance before and after the New Year holiday, with the capacity utilisation rate of sample all-steel tyre manufacturers in China declining 3.76 percentage points month-on-month, said financial news site cngold.
Rubber prices this week were buoyed by a bullish momentum in commodities, said one industry analyst, referring to gains earlier this week.
He said the run-up in prices prompted investors to take profits towards the end of the week, adding pressure on prices. Higher oil prices helped to cushion the dip in natural rubber prices. Oil prices rose for a second day on Friday, set for their third weekly gain, on uncertainty about the future of supply from Venezuela and as Iranian unrest increases concerns about output there.
The front-month rubber contract on Singapore Exchange’s SICOM platform for February delivery last traded at 183.1 US cents per kg, down 0.7 percent as of 0700.
The Osaka Exchange will be closed on Monday, January 12, for a holiday.