SINGAPORE: Japanese rubber futures ticked down on Monday for a third straight session, surrendering earlier losses as uncertain demand prospects offset a string of upbeat economic data from top consumer China.
The May Osaka Exchange (OSE) rubber contract closed down 0.8 yen, or 0.22%, at 362.2 yen ($2.41) per kg. The May rubber contract on the Shanghai Futures Exchange (SHFE) shed 45 yuan, or 0.25%, finishing at 18,210 yuan ($2,505.43) per metric ton.
It can be seen from the current weakness in industrial products markets that the macroeconomic outlook is still pessimistic, said Beite Futures, a Chinese futures trading institution.
Correspondingly, demand prospects for natural rubber have not improved, and historically only improve from the spring season onwards, added Beite Futures.
China’s factory activity expanded at the fastest pace in five months in November as new orders, including those from abroad, led to a solid rise in production, pushing manufacturers’ optimism degree to an eight-month high, a private-sector survey showed.
The reading largely echoed an official survey on Saturday, which showed manufacturing activity expanded modestly, suggesting a blitz of stimulus is finally trickling through the world’s second-largest economy just as Donald Trump ramps up his trade threats.
Prices of new homes in China rose at a faster pace in November, a separate survey showed on Sunday. China’s ailing property market accounted for roughly a quarter of economic activity at its 2021 peak and remains a key drag on its economy. The U.S. dollar gained 0.4% on the yen to 150.71, having shed 3.3% last week in its worst run since July. A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers.
The front-month January rubber contract on the Singapore Exchange’s SICOM platform last traded at 196.7 U.S. cents per kg, down 0.6%.
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