SINGAPORE: Japanese rubber futures fell on Wednesday, reversing morning gains, as a weak demand outlook for China weighed on sentiment, while cautious traders awaited more cues on the US Federal Reserve’s monetary policy. Osaka Exchange’s rubber contract for August delivery finished 1.4 yen, or 0.7%, lower at 213.6 yen ($1.59) per kg.
The benchmark contract hit its lowest level since Nov. 30 at 213.5 yen earlier in the session, posting a sixth consecutive session of declines.
The rubber contract on the Shanghai futures exchange for May delivery fell 10 yuan to finish at 11,940 yuan ($1,733.63) per tonne. Japan’s benchmark Nikkei share average closed up 0.03%.
The dip could be due to both cautious traders waiting on more clues from the Fed, and the overall demand outlook for rubber in China, a Singapore-based trader said.
“China’s inventory of rubber-finished goods is at a high of 1.6 million tonnes, and the consumption of tires until Q2 is estimated to be slow with tire factories inventory at around three-to-four-month high. China demand is unlikely to be there until at least Q2 to Q3.” Bruised US bank stocks regained some ground on Tuesday, as a sell-off sparked by Silicon Valley Bank’s collapse gave way to bargain-hunting by investors hopeful that efforts to shore up confidence would avert a wider financial crisis.
Investors were also relieved after February’s US inflation data was in line with analysts’ expectations, as there were worries that stronger-than-expected print might lead the Fed to hike rates aggressively.
Comments
Comments are closed.