SINGAPORE: Japanese rubber futures dipped on Tuesday, tracking lower Shanghai prices, though losses were limited by support from a weaker yen.
The Osaka Exchange rubber contract for September delivery finished 1.5 yen, or 0.6%, lower at 252.6 yen ($2.04) per kg.
Chinese traders are expecting weakening natural rubber demand from the country as they foresee a slowdown in factory production due to the ongoing lockdown in Shanghai, a Singapore-based trader said.
“OSE prices are not showing a strong direction. Lower prices today could also have been due to crude prices coming off a little, but on the other hand, you have a weakening yen and a strong physical market so I don’t think OSE prices will fall too much,” he added.
Oil prices extended losses from Monday, as Ukraine and Russia headed for peace talks and on concerns about demand as China’s financial hub Shanghai shut down to curb a surge in COVID-19 cases.
The dollar traded at 123.64 yen, against 123.22 yen on Monday afternoon in Asia. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
The rubber contract on the Shanghai futures exchange for May delivery was down 35 yuan to finish at 13,360 yuan ($2,097.53) per tonne.
China’s most populous city tightened the first phase of a two-stage COVID-19 lockdown on Tuesday, asking some residents to stay indoors unless they are getting tested as the number of new daily cases exceeded 4,400.
The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 170.8 US cents per kg, down 0.7%.