SINGAPORE: Japanese rubber futures fell on Thursday, tracking losses in the Shanghai market, as renewed concerns over slowing demand in top buyer China following announcements of fresh lockdown measures weighed on sentiment.
Osaka Exchange’s rubber contract for January delivery finished 2.0 yen lower at 227.6 yen ($1.70) per kg.
The rubber contract on the Shanghai futures exchange for September delivery fell 95 yuan to finish at 11,960 yuan ($1,771) per tonne.
“The markets are moving in line with negative sentiment as is usually the case when there’s news of fresh lockdown measures in China,” said a Singapore-based trader.
“Investors are understandably wary as they favour long-term stability, and consumption in China keeps getting affected by their zero COVID policy and the erratic lockdowns that follow,” he added.
There were concerns in the past few weeks over slowing rubber demand in China as extended lockdowns amid fresh outbreaks of COVID-19 would reduce industrial activity and consumption.
The southern Chinese city of Sanya, a tourism hotspot, imposed lockdown measures from Thursday in most parts of the city.
Mainland China’s Health Commission reported 446 new coronavirus cases for Aug. 3, compared with 436 new cases a day earlier.
Foreign investors continued to cut holdings in Chinese bonds in July and dumped equities for the first time in four months, according to a report by the Institute of International Finance (IIF).
Asian stocks rose in a choppy session on Thursday as a bit of nervous tension over Nancy Pelosi’s visit to Taiwan dissipated and as investors took cues from robust US data and earnings.
The front-month rubber contract on Singapore Exchange’s SICOM platform for September delivery last traded at 151.0 US cents per kg, down 0.7%.