SINGAPORE: Japanese rubber futures slid to a seven-week low on Friday, as traders booked profits from recent gains caused by supply disruptions, while a stronger yen also weighed on prices. The Osaka Exchange (OSE) rubber contract for December delivery fell 6.1 yen, or 1.85%, to finish at 324.1 yen ($2.02) per kg. The market hit its lowest since May 16 at 320.2 yen earlier in the session.
The September rubber contract on the Shanghai Futures Exchange (SHFE) closed down 465 yuan at a six-week low of 14,580 yuan ($2,006.11) per metric ton. The most active August butadiene rubber contract on the SHFE fell 425 yuan, or 2.81%, to 14,720 yuan ($2,025.37) per metric ton.
“Severe weather conditions have disrupted production in the past month,” leading to the “recent sharp increase in natural rubber prices which provided the opportunity for long-term investors to book profits”, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Producers are making more competitive offers, said Farah Miller, CEO of independent rubber-focused data firm Helixtap Technologies.
The yen rose 0.4% to 160.63 per dollar, for a second straight day of gains - something that has not happened since the start of June. A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Imports of electric vehicles made in top rubber consumer China will face EU tariffs of up to 37.6% from Friday, EU officials said, ratcheting up trade tension with Beijing.
The front-month rubber contract on the Singapore Exchange’s SICOM platform for August delivery last traded at 163.5 US cents per kg, down 2.2%.
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