SINGAPORE: Japanese rubber futures snapped a seven-session rally on Friday amid profit-taking and as weak China factory data weighed on sentiment, but still logged weekly and monthly gains.

The Osaka Exchange (OSE) rubber contract for November delivery closed down 5.2 yen, or 1.5%, at 341 yen ($2.17) per kg. It rose 2.93% week-on-week to mark its fourth consecutive weekly rise, and rose 11.07% month-on-month.

The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 285 yuan to finish at 15,350 yuan ($2,119.23) per metric ton. The sharp rise in rubber prices recently could be attributed to an abrupt surge in ocean freight rates on container shortages, said Farah Miller.

“Shipping lines operating to India from the Far East are reporting severe delays in the delivery of raw material consignments from Southeast Asia to tyre makers in India, due to congestion in the Southeast Asian ports for over one-and-a-half months now.”

The pullback in futures today was probably due to profit-taking ahead of the weekend, Miller added. China’s bleak factory data also weakened rubber’s demand prospects and weighed on investor sentiment, said Jom Jacob, chief analyst at India-based analysis firm What Next Rubber.

China’s manufacturing activity unexpectedly fell in May, keeping alive calls for fresh stimulus as a protracted property crisis in the world’s second-largest economy continues to weigh on business, consumer and investor confidence.

Despite weaker rubber futures today, speculative funds are “likely to return to the futures market on account of the profit potential amid growing supply concerns in the physical markets,” Jacob added. * The front-month rubber contract on the Singapore Exchange’s SICOM platform for June delivery last traded at 173 US cents per kg, down 3.4% on its last trading day.