SINGAPORE: Japanese rubber futures hit their lowest in nearly 10 months on Thursday, tracking losses in the Shanghai market, as weak domestic and China manufacturing data stoked worries about a slowdown in demand.
The Osaka Exchange rubber contract for February delivery was down 5.5 yen, or 2.4%, at 220.6 yen ($1.58) per kg, as of 0215 GMT. The benchmark contract hit its lowest since mid-November earlier in the day.
The rubber contract on the Shanghai futures exchange for January delivery was down 155 yuan, or 1.2%, at 12,445 yuan ($1,803) per tonne. Japan’s benchmark Nikkei share average opened down 1.05%.
“The markets follow China, still exercising their zero-COVID policy, and which reported a rise in cases and announced fresh lockdown measures,” said Farah Miller, chief executive officer of Helixtap Technologies, an independent rubber-focused data company. This stoked fears of a further hit to demand, she added.
Parts of China’s southern city of Guangzhou imposed COVID-19 curbs on Wednesday, joining the tech hub of Shenzhen in battling flare-ups, fuelling uncertainty over commerce and daily life in two of the region’s most economically vibrant metropolises.
China’s factory activity contracted for the first time in three months in August amid weakening demand, while power shortages and fresh COVID-19 flare-ups disrupted production, a private sector survey showed.