Rubber Prices Plummet on Oil Drops and Stronger Yen

Japanese rubber futures plummeted to their lowest close in nearly a week on Monday due to several factors. Lower oil prices and a firmer yen significantly impacted the market, causing the Osaka Exchange rubber contract for December delivery to finish at 416.0 yen (USD2.6) per kg, down by 2.0 yen or 0.48% from the previous day.

The Shanghai Futures Exchange rubber contract for September delivery also fell, closing at 16,760 yuan (USD2,477) per metric ton, a decline of 95 yuan. Analyst Jiong Gu from Yutaka Trusty Securities attributed the selling pressure to lower oil prices and expectations that the yen will not weaken beyond 164 per dollar.

The El Niño weather phenomenon is expected to continue affecting Southeast Asia's rubber production, keeping near-term contracts trading within a narrow range of 410-430 yen. Oil prices dropped over 6% on Monday after the US and Iran paused strikes, increasing hopes for a diplomatic solution that could ease tensions in the Strait of Hormuz.