The price of rubber closed down more than 1% in trading today, Thursday (8/2/2018), following the weakening of crude oil prices.
The price of rubber for delivery in July 2018 on the Tokyo Commodity Exchange (Tocom), closed down 1.64% or 3.20 points to 192.30 yen per kilogram (kg).
Previously, July's rubber contract price opened down 0.20% or 0.40 points at 195.10, after able to book a rebound by ending up 0.93% or 1.80 points at position 195.50 on Wednesday trading (7/2 ).
According to Gu Jiong, an analyst at Yutaka Shoji, the rubber market is under pressure from weakening oil prices.
The price of WTI oil in March 2018 contract was down 0.34% or 0.21 points to US $ 61.58 per barrel at 13:56 pm, after dropping 2.52% or 1.60 points at 61.79 in late trading Wednesday 7/2).
Oil stays below $ 62 a barrel after US crude oil production surged to a record, raising concern global supplies will weigh on demand.
"In addition, the negative sentiment towards prices is also influenced by high levels of rubber inventories, especially in the Shanghai market," added Gu Jiong, as quoted by Bloomberg.
China's rubber reserves monitored by the Shanghai Futures Exchange increased 1.7% last week to 426,498 tons, the tenth consecutive weekly rise. The Rubber Trading Association of Japan recorded an increase in rubber stock by 8.2% to 13,307 tons.
On the other hand, the yen exchange rate was observed to weaken 0.27% or 0.29 points to 109.62 yen per dollar at 14.10 WIB, after trading on Wednesday (7/2) ended up 0.21% or 0, 23 points.
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