SHANGHAI: Japanese rubber futures eased to their lowest level in nearly a month on Monday, pressured by a decline in oil prices, although losses were capped as weather-related disruptions affected tapping in key rubber-producing regions.
The Osaka Exchange (OSE) rubber contract for March delivery was down 2.4 yen, or 0.54 percent, at 445.5 yen (USD2.84) per kg. Earlier in the session, the contract touched its lowest point since September 30 The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 70 yuan, or 0.36 percent, to 19,545 yuan (USD2,930.20) per metric ton.
The most active December butadiene rubber contract on the SHFE rose 450 yuan, or 2.82 percent, to 16,380 yuan per metric ton. Oil prices fell after surging to near six-month highs last week on hopes of easing hostilities between the US and Iran, although persistent attacks on key producer Saudi Arabia kept investors wary.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil Raw materials remain scarce in some rubber-producing countries, including Indonesia, while El Niño-related weather continued to affect cup-lump quality and tapping activity, Japan Exchange Group said in a report on Monday. Market sentiment remains steady, with the broader uptrend intact, said Japan Exchange Group.
The meteorological agency in top rubber producer Thailand warned of heavy rains and flash floods in the South from October 25-28, which could disrupt tapping activity in key producing areas.
Rainfall has eased in northern Thailand, with rubber farmers actively tapping and new output slowly rising, while southern and eastern producing areas remain disrupted, analysts from broker Everbright Futures said in a note.
The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 249.7 US cents per kg, down 0.6 percent as of 0705 GMT.