Japanese rubber futures snap ten-day rally
The Osaka Exchange (OSE) rubber contract for August delivery closed down 7.7 yen, or 2.17%, at 346.5 yen ($2.31) per kg, the lowest close since March 15. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery rose 225 yuan to finish at 15,395 yuan ($2,138.43) per metric ton. It hit a limit high price of 15,805 yuan earlier in the session. Thailand’s benchmark smoked rubber sheet (RSS3) eased from a seven-year high. Its export-grade rubber sheet was quoted at 98.53 Thai baht ($2.74) per kg on a free-on-board basis on Tuesday, 1.41% lower than Monday. Oil prices dipped due in part to the prospect of rising supply from Russia, slower-than-expected downstream demand in sectors such as jet fuel, and cautious trading ahead of the Federal Reserve’s decision on US interest rates. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The Bank of Japan (BOJ) on Tuesday decided to end its negative interest rate policy, marking the country’s first interest rate hike since 2007. Japan’s benchmark Nikkei average closed 0.66% higher at 40,003.60. The Japanese yen weakened 0.82% to 150.39 against the dollar.
Top rubber producer Thailand’s meteorological agency warned of summer storms from March 19-20 potentially causing crop damage. Japan’s financial markets will be closed on March 20 for a market holiday, and trading will resume on March 21.
The front-month rubber contract on the Singapore Exchange’s SICOM platform for April delivery last traded at 171.8 US cents per kg, down 0.87%.
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