BEIJING: Japanese rubber futures fell on Monday after rallying more than 4percent last week, as traders monitored developments surrounding the Middle East conflict and supply conditions in major producing countries.
The Osaka Exchange (OSE) rubber contract for October delivery was down 1.18percent at 417.1 yen (USD2.62) per kg, as of 0244 GMT. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 0.79percent to 17,945 yuan (USD2,651.53) per metric ton. The most-active June butadiene rubber contract on the SHFE rose 2.8percent to 14,845 yuan per ton.
Oil prices rose more than 2percent in early trading after Israel ordered troops to move further into Lebanon in the battle with the Iranian-backed Hezbollah militant group, despite a ceasefire announced more than six weeks ago.
Natural rubber often tracks oil prices as it competes for market share with synthetic rubber, which is made from crude oil. “The rubber market has been demonstrating support and range-bound trading patterns,” a Singapore-based trader said.
Market participants remain cautious, closely monitoring developments in the Middle East conflict and seasonal supply trends, comparing expected peak-season output with actual arrivals to assess the market’s future direction, he said.
Japan’s Nikkei rose a further 1percent, having risen almost 5percent last week to all-time highs. The yen weakened 0.08percent to 159.41 per dollar, making yen-denominated assets more affordable for overseas buyers.