Rubber futures lower on ‘long liquidation’ and weak sentiment

Tokyo – Natural rubber futures closed the week ended 22 May lower across major exchanges amid “profit-taking by commodity funds and long liquidation,” according to Japan Exchange Group (JPX).

In Osaka, Japan, OSE October rubber contract closed down 3.0% week-on-week “in generally quiet trading.”

“Weak overseas markets and long liquidation,” JPX said 25 May, “continued to weigh on prices over the past couple of weeks.”

In Shanghai, China, meanwhile, both SHFE and INE rubber futures closed down, 1.4% and 1.0% respectively.

Singapore’s SICOM's August contract closed marginally lower, down 0.2%, in “moderate rangebound trading,” said JPX.

In Singapore, said the exchange group, “prices were pressured by overseas long liquidation, although physical demand helped keep prices relatively stable.”

JPX noted a “sharp decline” in weekly open interest.

This, it said, suggests that Chinese commodity funds and speculators “may have liquidated” 220 kilotonne of rubber futures contracts on both the SHFE and INE markets during the second week of selling.

Prices may also come under further pressure with the full resumption of tapping activities in the Northern Hemisphere following the wintering season.

Full-scale production, JPX said, is expected in the coming months.