The price of rubber slumped more than 1% in trading this morning, Thursday (8/2/2018), along with the continued weakening of crude oil prices.
Rubber for July 2018 at Tokyo Commodity Exchange (Tocom), shed 1.28 percent, or 2.50 points, to 193 yen per kilogram (kg) at 10,17 pm.
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.
WTI oil price contract in March 2018 observed further weakened 0.31% or 0.19 points to US $ 61.60 per barrel at 10:14 pm, after dropping 2.52% or 1.60 points at position 61.79 at the end of 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 stagnated at 109.33 to the US dollar at 10:23 pm, after trading Wednesday (7/2) ended up 0.21% or 0.23 points.
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