Business Recorder
Japanese rubber futures declined on Thursday, after the previous day’s sharp rally that resulted in fewer spot transactions. The Osaka Exchange (OSE) rubber contract for October delivery declined 3.6 yen, or 0.85%, at 419.3 yen ($2.66) per kg. Prices closed 2.77% higher yesterday, their strongest single-day rally since late February. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery slipped 245 yuan, or 1.36%, to 17,765 yuan ($2,618.35) per metric ton. The most active June but adiene rubber contract on the SHFE fell 180 yuan, or 1.14%, to 15,630 yuan per metric ton. The sudden and sharp upturn on Wednesday resulted in a low number of physical bids being placed, said Farah Miller, CEO of rubber data analytics firm Helixtap Technologies. She said the price rise was largely speculative, with commodity funds possibly moving in to cover shorts, not because of any significant change in rubber demand. Concerns over a potential supply squeeze from worsening El Nino forecasts could have also sustained the rally in rubber prices late on Wednesday, said Zhu Meixia, senior energy and chemical analyst at Shandong Gold Futures. Although Southeast Asia’s main producing countries have entered peak tapping season, high temperatures and a lack of rainfall earlier in the year have disrupted the trees’ physiological cycles, slowing latex production, Zhu highlighted. Markets are also focusing on the high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping to see if it will yield any positive results on the Iran war, which has significantly disrupted global oil supply. Any positive news from the meeting would lend supportive sentiment to commodity markets. The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 223 U.S. cents per kg, down 3.7%.
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