BEIJING (May 28): Benchmark Tokyo rubber futures recovered from early fall to close slightly higher on Monday, but were under pressure from declining oil prices and high rubber inventories in Shanghai.
“Both Shanghai and Tokyo rubber fell in early trade, weighed down by falling oil prices, which usually have a big impact on the futures market,” said Tang Xiaonan, an analyst with JLC Network Technology Co Ltd.
“High inventories and sluggish demand also kept rubber prices under pressure, giving them little room to rise,” said Tang.
The Tokyo Commodity Exchange rubber contract for November delivery finished 0.3 yen higher at 193.4 yen per kg.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 140 yuan to finish at 11,720 yuan per tonne.
Oil prices fell, extending even steeper declines from Friday, as Saudi Arabia and Russia discussed easing production cuts and as US production gains show no signs of abating.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.7% from the previous Friday, the exchange said on Friday.
The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 143.4 US cents per kg, down 1.3 cents.