SINGAPORE: Japanese rubber futures snapped a six-session rally on Monday, tracking losses in the Shanghai market, while weaker crude prices discouraged a switch to natural rubber from synthetic rubber which is derived from oil.
The Osaka Exchange rubber contract for September delivery finished 2.8 yen lower at 254.1 yen ($2.06) per kg. Earlier in the session, the benchmark hit 257.7 yen, the highest level since March 4.
The new benchmark lost 2.2 yen, or 0.9%, from Friday’s close of August contract, the previous benchmark.
The OSE’s March contract expired at 258.0 yen per kg on Friday.
Traders are expecting weaker demand for rubber from Shanghai due to the ongoing lockdown, a Singapore-based trader said.
Oil prices tumbled more than $5 on Monday as fears over lower fuel demand in China grew after financial hub Shanghai launched a two-stage lockdown to contain a surge in COVID-19 infections.
Japan’s benchmark Nikkei share average ended 0.7% lower, snapping a nine-day rally on profit-booking ahead of the fiscal year-end.
The rubber contract on the Shanghai futures exchange for May delivery was down 70 yuan to finish at 13,410 yuan ($2,104.55) per tonne.
China’s financial hub of Shanghai launched a planned two-stage lockdown of the city of 26 million people on Monday, closing bridges and tunnels, and restricting highway traffic in a scramble to contain surging local COVID-19 cases.
A record 3,450 asymptomatic COVID-19 cases were reported in Shanghai on Sunday, accounting for nearly 70% of the nationwide total, along with 50 symptomatic cases, the city government said.
Source: Brecorder
