SINGAPORE: Japanese rubber futures declined for the second consecutive day on Tuesday amid prospects of easing supply concerns while lower synthetic rubber prices added further pressure.
The April Osaka Exchange (OSE) rubber contract closed down 2 yen, or 0.54%, at 365.0 yen ($2.39) per kg. The January rubber contract on the Shanghai Futures Exchange (SHFE) fell 155 yuan, or 0.87%, to finish at 17,750 yuan ($2,485.92) per metric ton. The most active January butadiene rubber contract on the SHFE lost 160 yuan, or 1.06%, closing at 14,920 yuan ($2,089.58) per metric ton.
The natural rubber market’s supply outlook has changed drastically recently, with the seasonal increase in production expected to be bearish for rubber prices, Chinese financial information site Hexun Futures said in a note. The weather in Thai production areas is good, but heavy rainfall in China’s rubber-producing regions is hindering output, with some plantations in Yunnan possibly halting harvesting, Hexun Futures said.
In top producer Thailand, total rainfall in the northern and northeastern regions is expected to be 10% less than normal this month, the country’s meteorological department said.
The yen languished near a three-month trough on Tuesday, remaining under pressure as an election loss by Japan’s ruling coalition raised uncertainty surrounding the nation’s political and monetary policy. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Oil prices were little changed on Tuesday after falling in the previous session, as a US plan to purchase oil provided support though wider demand concerns exerted pressure.
Source: Brecorder
