SHANGHAI: Japanese rubber futures fell on Thursday, pressured by a slip in oil prices and a slump in Tokyo equities. The Osaka Exchange rubber contract for February delivery was down 3.9 yen, or 0.89percent, at 433.9 yen (USD2.83) per kg. It is up nearly 2.3percent so far over the last week.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 165 yuan, or 0.84percent, to 19,455 yuan (USD2,900.83) per metric ton. The most active October butadiene rubber contract on the SHFE lost 215 yuan, or 1.36percent, to 15,645 yuan per metric ton.
Oil prices dipped on Thursday, but Brent crude remained above USD100 a barrel as traders braced for deeper supply disruptions after Iran and the United States launched their largest attacks on shipping since their six-month-old conflict began. Natural rubber often follows oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Japan’s Nikkei share average slumped on Thursday, as global markets felt the pressure from high oil prices. Top rubber producer Thailand’s meteorological agency warned of intense tropical storms from September 11 to 15.
The current rally in natural rubber prices is primarily driven by anticipated trading around El Niño weather premiums rather than confirmed fundamentals, and could reverse quickly if rainfall in Southeast Asia’s main producing regions eases drought risk, analysts from broker Baocheng Futures said in a note.
Elsewhere, top rubber consumer China’s vehicle sales fell 5.1percent year-on-year in August, according to the China Association of Automobile Manufacturers. Automobile sales could influence the intensity of automobile manufacturing, which uses rubber-made tyres. The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 244.4 US cents per kg, down 1.8percent as of 0700 GMT.