SINGAPORE: Japanese rubber futures edged lower on Thursday, ending a two-session rise as high inventories in China overshadowed concerns about global supply, while weaker synthetic rubber prices also pressured the market.
The Osaka Exchange (OSE) rubber contract for June delivery closed down 2.2 yen, or 0.59%, at 369.6 yen ($2.35) per kg. The May rubber contract on the Shanghai Futures Exchange (SHFE) fell 175 yuan, or 0.99%, to 17,505 yuan ($2,398.21) per metric ton. Port inventories of natural rubber in China increased further this week, with stockpiles in Qingdao rising sharply to 470,000 tons, said Chinese rubber sales portal Natural Rubber Network. Meanwhile, harvesting in China’s Yunnan has stopped and some processing plants have halted operations, while harvesting in the northeastern region of Thailand will gradually come to an end from next month, said Natural Rubber Network. In top rubber producer Thailand, farmers in the upper regions should brace for crop damage from Dec. 26-27, the country’s meteorological agency said on its website. In the southern areas, farmers should brace for heavy rains that may cause flash flood from Dec. 28-30, the agency said. The most-active February butadiene rubber contract on the SHFE dropped 385 yuan, or 2.86%, to 13,085 yuan ($1,792.66) per metric ton.
Oil prices edged higher in thin holiday trading, driven by hopes for additional fiscal stimulus in China, the world’s biggest oil importer, while an anticipated decline in US crude inventories also provided support. China is also the world’s top consumer of rubber. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 191.1 US cents per kg, up 0.5%.
Source: Brecorder
