TOKYO: Japanese rubber futures fell for a seventh consecutive session on Wednesday, hitting a nearly two-year low, as concerns over slow demand in the world’s top buyer China grew after bearish economic data.
The Osaka Exchange (OSE) rubber contract for January delivery finished 0.3 yen, or 0.2%, lower at 195.9 yen ($1.4) per kg, after hitting the lowest since September 2021 of 195.1 yen earlier in the session. The rubber contract on the Shanghai futures exchange (SHFE) for January delivery, however, rose 75 yuan to finish at 12,980 yuan ($1,802) per metric ton.
“The OSE prices have been undervalued compared to those in Shanghai and producing countries such as Thailand, but they remained under pressure due to the influence of foreign investors who were holding their positions to profit from spread trading,” a Tokyo-based dealer said. “But fresh supply from producing countries to Japan has been declining due to the undervaluation and local inventories have been falling, so the market will likely reverse at some point,” he said.
China’s consumer sector fell into deflation and factory-gate prices extended declines in July, as the world’s second-largest economy struggled to revive demand and pressure mounted on Beijing to release more direct policy stimulus. China’s imports and exports fell much faster than expected in July as weaker demand threatens recovery prospects in the economy.
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