Japan futures slip as raw material supply set to ease, demand stays weak

By Reuters News

By Emily Ou Yong

Oct 14 (Reuters) - Japanese rubber futures eased on Wednesday, pressured by expectations that raw material supply in top producer Thailand will loosen as the peak production season advances and by persistently weak tyre demand in top consumer China. Higher oil prices limited the size of losses.

  • The Osaka Exchange (OSE) rubber contract for March delivery , was down 2.5 yen, or 0.54%, at 458 yen ($2.89) per kg as of 0200 GMT

  • The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 95 yuan, or 0.46%, to 20,420 yuan ($3,051.40) per metric ton

  • The most active November butadiene rubber contract on the SHFE rose 55 yuan, or 0.34%, to 16,260 yuan per metric ton

  • Heavy rain in Thailand has eased since mid-to-late October, ahead of the region's peak production season in the fourth quarter, pointing to a sequential rise in supply, analysts from broker Everbright Futures said in a note

  • Tyre factory restocking has been slow following a local holiday and given persistently high raw material costs, limiting demand, said the Everbright analysts

  • Thai raw material prices are expected to ease in October as the region enters its seasonal production upswing, barring further weather disruption, analysts from broker GF Futures said in a note

  • Oil prices climbed on Wednesday as traders weighed supply risk from fighting between Yemen's Iran-allied Houthis and Saudi Arabia against the prospect of increased diesel from Russia O/R

  • Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil

  • The front-month rubber contract on Singapore Exchange's SICOM platform for January delivery last traded at 258.5 US cents per kg, up 1.2%

($1 = 158.3900 yen)

($1 = 6.6920 Chinese yuan)

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