Continued crude oil price weakening finally forced rubber prices to close lower in trading today, Thursday (5/10/2017).
The price of rubber for delivery in March 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.24% or 0.50 points at 208 yen per kilogram (kg).
In fact, rubber had resumed its rally when the morning opened with a gain of 0.34% or 0.70 points at 209.20 yen per kg position, after trading on Wednesday (4/10) ended up 1.31% or 2.70 points at position 208.50.
The weakening of rubber prices in trading today ended a three-day rally in a row earlier which was boosted by the decline in the amount of rubber reserves in Japan.
According to Naohiro Niimura, market research firm Risk Advisory, rubber prices are weighed down by crude oil price weakness.
"The weakening of oil prices weighs on rubber in the midst of a lack of new fundamental factors," said Niimura, as quoted by Bloomberg.
WTI oil prices continued to fall down 0.14% or 0.07 point to US $ 49.91 per barrel at 13:30 pm, after trading Wednesday (4/10) ended down almost 1% at 49.98.
US crude oil prices slipped below $ 50 a barrel after a government report showed record US exports during refinery maintenance during the fall season usually reduced demand.
The decline is also likely triggered by producers who are rushing to lock in their earnings in the range of US $ 50 per barrel with hedging contracts.
On the other hand, the yen exchange rate was observed to weaken 0.04% or 0.05 point to 112.81 position per US dollar at 13.39 WIB, after on Wednesday ended up appreciating 0.08% at 112.76 position.
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