SINGAPORE, May 21 (Reuters) –
- Japanese rubber futures closed lower on Tuesday, tracking a drop inoil prices, although a weaker yen and higher physical prices limited the losses.
- The Osaka Exchange (OSE) rubber contract for October delivery JRUc6, 0#2JRU: closed down 3.9 yen, or 1.19%, at 325 yen ($2.08) per kg.
- The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery SNRv1 fell 50 yuan to finishat 14,725 yuan ($2,034.57) per metric ton.
- Oil prices extended losses with investors anticipating lingering U.S. inflation and higher interest rates depressing consumer and industrial demand. O/R
- Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
- The yen JPY= struggled on the weaker side of the 156 level against the dollar. A weaker currency makes yen-denominated assets more affordable to overseas buyers. FRX/
- Despite the weather forecast predicting rain in Yunnan, China, actual rainfall has been minimal, leading to mild drought in Yunnan’s rubber producing areas, consultancy Huatai Futures said in a note.
- Low arrivals of primary forms of natural rubber at various local markets in Thailand have been driving physical prices higher, said Jom Jacob, the chief analyst at India-based analysis firm What Next Rubber.
- Thailand’s benchmark export-grade smoked rubber sheet (RSS3) RUB-RSS3C-BKK hit 88.59 baht ($2.44) per kg on Tuesday, 0.6% higher than Monday.
- However, investors in rubber futures may pull back at any time to take profit as “China’s stimulus-induced rally can fade out very soon” amid the lack of fresh positive news, Jacob added.
- The front-month rubber contract on the SingaporeExchange’s SICOM platform for June delivery STFc1 last traded at 170.2 U.S. cents per kg, down 0.2%.
($1 = 156.2200 yen)
($1 = 7.2374 yuan)
($1 = 36.3500 baht)
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