SINGAPORE: Japanese rubber futures dipped on Thursday, snapping a six-day rally as weak economic data from top consumer China weighed on the market, although higher synthetic rubber prices and supply disruptions limited losses.
The Osaka Exchange (OSE) rubber contract for January delivery closed down 0.4 yen, or 0.12%, at 323.2 yen ($2.20) per kg. The January rubber contract on the Shanghai Futures Exchange (SHFE), however, closed up 150 yuan, or 0.94%, at 16,025 yuan ($2,239.25) per metric ton. The most active October butadiene rubber contract on the SHFE rose 145 yuan, or 1.02%, to 14,345 yuan ($2,004.50) per metric ton. Data from the National Bureau of Statistics (NBS) on Thursday found China’s factory output slowed for a third straight month in July, showing recovery in the world’s second-largest economy was losing steam, although the battered consumer sector perked up slightly as stimulus targeting households took effect.
China’s new home prices fell at their fastest pace in nine years in July, NBS data showed on Thursday. The country’s prolonged housing market slump has weighed heavily on its economy and consumers, with analysts saying Beijing’s 5% GDP target for 2024 may be too ambitious. Top producer Thailand’s meteorological agency warned of heavy rains that may cause flash floods from Aug. 15-21.
Additionally, some defaults by Vietnamese processors, driven by rising rubber prices, have led to a sudden shortage, further exacerbating a market imbalance caused by slowing supply, said a Singapore-based trader.
The yen was steady at 147.315 per dollar after data showed Japan’s economy expanded at a faster-than-expected rate in the second quarter, keeping another near-term rate hike on the table.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. The front-month September rubber contract on the Singapore Exchange’s SICOM platform last traded at 173.1 US cents per kg, up 1.1%.
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