Japanese rubber futures drop as oil slips, Tokyo shares weaken
SHANGHAI: Japanese rubber futures fell on Monday as a dip in oil prices and weaker Tokyo shares weighed on the commodity, extending three consecutive weekly losses and eroding previous upside momentum.
The Osaka Exchange (OSE) rubber contract for April delivery was down 4.3 yen, or 0.97 percent, at 438.1 yen (USD2.78) per kg. The contract has fallen 3.8 percent in the last three weeks from a 15-year high of 459.8 yen hit in the week of October 5.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 130 yuan, or 0.68 percent, to 19,310 yuan (USD2,904.76) per metric ton. The most active December butadiene rubber contract on the SHFE gained 50 yuan, or 0.29 percent, to 17,010 yuan per metric ton. Prices have declined for three consecutive weeks on profit-taking and fresh selling, Japan Exchange Group (JPX) said in a report on Monday.
Oil prices slipped more than 3 percent on Monday after Iranian and Qatari officials held a third straight day of talks. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Japan’s Nikkei share average fell on Monday as memory chip maker Kioxia tanked, while gains in Tokyo Electron and other firms with strong outlooks limited the losses, with the Nikkei ending 0.33 percent lower.
Weaker global equities, a slowing Chinese economy and expectations of further central bank rate hikes weighed on commodity prices, including rubber, JPX said.
The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) edged down 0.3 percent month-on-month to USD2.79 per kg in September as tyre manufacturers limited purchases to immediate needs after earlier price increases, the Association of Natural Rubber Producing Countries said in its September report.
The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 247.2 US cents per kg, up 0.9 percent as of 0700 GMT.