SINGAPORE: Japanese rubber futures fell on Thursday, pressured by a slowdown in Chinese auto sales, although a weaker yen provided some support to prices.
The Osaka Exchange rubber contract for March delivery was down 1 yen, or 0.33 percent, at 299 yen (USD2.03) per kg. Top Chinese auto maker BYD’s third-quarter sales fell 2.1 percent year-on-year, marking the first quarterly decline for the firm in more than five years. The slowdown signals a possible end to BYD’s era of record-setting expansion.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres. Chinese markets are closed from October 1 to 8 for the Golden Week holiday. Japan’s Nikkei was up 0.87 percent, with chip stocks tracking their US peers higher. The dollar traded at 147.18 yen, up 0.1 percent from late US levels as traders weighed the impact of the US government shutdown.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. Oil prices rebounded from 16-week lows on prospects of tighter sanctions on Russian crude.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows in its weather forecast for October 2-8.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 168.7 US cents per kg, up 0.4percent.
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