Japan futures retreat on weak tyre demand ahead of China holidays

By Reuters News

By Emily Ou Yong

Sept 28 (Reuters) - Japanese rubber futures snapped a five-session winning streak on Monday, weighed down by weak tyre demand ahead of holidays in top consumer China, although losses were limited by higher oil prices.

  • The Osaka Exchange (OSE) rubber contract for March delivery , was down 7.1 yen, or 1.57%, at 445 yen ($2.82) per kg.

  • The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 150 yuan, or 0.77%, to 19,275 yuan ($2,870.31) per metric ton.

  • The most-active November butadiene rubber contract on the SHFE rose 140 yuan, or 0.91%, to 15,515 yuan per ton.

  • Tyre demand will keep declining during maintenance shutdowns over China's long holiday, keeping rubber demand weak in the short term, analysts from broker Huatai Futures said in a note.

  • Rubber prices broke through multi-year highs last week, though the 14-day relative strength index at 73.4% signals overbought conditions and occasional corrections are expected, Japan Exchange Group said in a report on Monday.

  • Brent crude rebounded more than 3% on Monday after US President Donald Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz, keeping tensions in the Middle East elevated. O/R

  • Higher oil and butadiene prices have lifted synthetic rubber costs, boosting demand for natural rubber as a substitute, analysts from broker Guoyuan Futures said in a note.

  • The front-month rubber contract on Singapore Exchange's SICOM platform for December delivery last traded at 247.4 U.S. cents per kg, down 1.6% as of 0705 GMT. It touched its highest since May 22, 2013, earlier in the day.

($1 = 157.5500 yen)

($1 = 6.7153 Chinese yuan)

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