Rubber futures fall as weak oil prices outweigh the impact of rainfall in southern Thailand

(1) Japanese rubber futures fell on Tuesday, as the impact of declining oil prices outweighed the widening price gap between RSS3 and latex caused by continued rainfall in southern Thailand. (2) The Osaka Exchange April delivery rubber contract fell by 1.9 yen, or 0.42%, to 446.5 yen per kilogram. (3) The Shanghai Futures Exchange January delivery rubber contract fell by 320 yuan, or 1.63%, to 19,365 yuan per ton. (4) The most actively traded December butadiene rubber contract on the Shanghai Futures Exchange rose 300 yuan, or 1.83%, to 16,660 yuan per ton, as low spot inventories and the recent strengthening of crude oil continued to exert cost pressure. (5) Oil prices fell by about 1%, as negotiations in Tehran increased optimism for resolving the US-Israel conflict with Iran, temporarily easing supply concerns, despite renewed attacks on Saudi Arabia by Yemen’s Houthi forces. (6) Natural rubber often fluctuates with oil prices since it competes with synthetic rubber, which is made from crude oil, for market share. (7) According to some institutions, improved weather in China’s producing regions is boosting supply, while continued rainfall in southern Thailand may further widen the price gap between RSS3 and latex. (8) The latest Singapore Exchange SICOM platform January delivery rubber contract was quoted at 248.5 US cents per kilogram, down 0.8%.