Rubber futures fall on 'long liquidation', 'profit-taking' by funds

Tokyo – Natural rubber futures ended the second trading week of May lower across major exchanges amid “profit-taking by commodity funds and long liquidation,” according to Japan Exchange Group (JPX).

“Persistently high crude oil prices” linked to the ongoing Middle East conflict also continued to raise inflationary concerns, JPX said 18 May.

Traders, meanwhile, increasingly expect the US Federal Reserve to raise interest rates following stronger-than-expected US producer price index (PPI) data for April.

Over the week ended 15 May, OSE’s October rubber futures contract settled 0.1% lower for the week.

On the Shanghai Futures Exchange (SHFE) and Shanghai International Energy Exchange (INE), rubber contracts fell 2.1% and 2.8% week-on-week, respectively, on strong trading volumes.

Both SHFE and INE also recorded sharp declines in open interest, indicating that “large long positions were being liquidated,” JPX said.

In Singapore, SICOM’s August rubber contract ended the week marginally lower, down 0.3% in active trading.

According to JPX, recent price rallies had attracted more than 500,000 tonnes of new long rubber futures positions.

Commodity funds are estimated to have liquidated around one-third of those positions, equivalent to about 200,000 tonnes, during the past week.