Japanese rubber futures declines on falling physical

SHANGHAI: Japanese rubber fell for a fifth session on Tuesday amid falling physical and oil prices. However, a rally in Japanese equities and expectations of supply constraints helped curb downside. The Osaka Exchange (OSE) rubber contract for September delivery was down 0.2 yen, or 0.05percent, at 390.1 yen (USD2.45) per kg.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 10 yuan, or 0.06percent, to 16,740 yuan (USD2,455.70) per metric ton.

The most active May butadiene rubber contract on the SHFE rose 240 yuan, or 1.52percent, to 15,985 yuan per metric ton.

The prices of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) and block rubber were down 2.05percent and 1.48percent, respectively, to stand at 89.5 baht per kg and 72.6 baht per kg. Oil prices fell on Tuesday in Asian trade, as concerns about supply risks stemming from the US blockade of the Strait of Hormuz were allayed by signs of possible talks to end the US-Iran war.

Natural rubber often follows oil prices as it competes with synthetic rubber, which is made from crude oil.

However, a rally in Japanese equities helped improve market sentiment, with the Nikkei 225 index jumping 2.43percent to 57,877.39, a six-week high, as investors were optimistic over negotiations to end the conflict.

Meanwhile, hot weather hampered tapping in Thailand, the top producer, adding to supply concerns. High temperatures in northern Thailand have delayed tapping, with full operations now expected to resume only toward the end of April, Chinese broker CITIC Securities Futures said in a report said.

Tapping in Vietnam and rubber-producing regions in China, including Yunnan and Hainan, is also likely to be disrupted due to insufficient soil moisture, the report added.