SINGAPORE: Japanese rubber futures tumbled on Wednesday on expectations of higher raw material volumes from top producer Thailand and as worries about Tokyo’s economy weighed on sentiment.
The Osaka Exchange rubber contract for November delivery ended down 3.1 yen, or 1.3%, at 258.4 yen ($1.94) per kg, its biggest daily percentage decrease since May 13.
There have been less rain and fewer floods in Thailand, leading to expectations that raw material supply would increase, said a Singapore-based trader.
Demand for natural rubber in China and factories’ level of operations are still below traders’ expectations even after China eased some of its COVID-19 curbs, the trader added.
There are also still some disruptions to supply chains in China and a delay in the movement of goods as truckers still have to undergo quarantine requirements, he added.
Japan’s current account surplus shrank sharply in April as record imports overwhelmed exports, swinging the trade balance into the red, data showed on Wednesday, stoking some concerns about the country’s long-term purchasing power.
The Bank of Japan will consider downgrading its assessment on factory output at this month’s policy meeting, sources said, as supply disruptions caused by China’s strict COVID-19 lockdowns take a heavy toll on the economy.
The rubber contract on the Shanghai futures exchange for September delivery was up 20 yuan to finish at 13,270 yuan ($1,988.97) per tonne.
The front-month rubber contract on Singapore Exchange’s SICOM platform for July delivery last traded at 166.7 US cents per kg, up 0.3%.
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