Tokyo rubber futures fell on Wednesday, retreating further from a 28-year high marked the previous day, as they tracked a sharp decline in crude oil prices. The key Tokyo Commodity Exchange rubber contract for November delivery fell as low as 336.3 yen per kg, down 5 yen or 1.5 percent. It was trading at 337.5 yen at 0112 GMT.
The benchmark rubber contract rose to an intraday peak of 345.9 yen on Tuesday, the highest for a key contract since April 1980, before ending at 341.3 yen. TOCOM rubber has been lifted higher in part due to the sharp rise in crude oil prices, which hit record highs over $135 a barrel last week.
Rubber prices often benefit from high crude oil prices because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product. Front-month US crude for July delivery was down 37 cents at $128.48 on the Globex electronic trading platform.
Tightness in physical supplies, due to the disruption of production because of poor weather conditions, has also been a factor supporting rubber prices.The dollar was at 104.16/17 compared with 104.28/31 late in New York.
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