SINGAPORE: Japanese rubber futures closed at its lowest level in almost two years on Friday as China’s auto sector support did little to lift market sentiment amid ongoing sluggishness in the world’s second-largest economy.
Osaka Exchange’s rubber contract for December delivery finished 1.3 yen, or 0.6%, lower at 202.0 yen ($1.44) per kg, its lowest since September 2021. Rubber prices declined 1.5% for the week, shedding 4.7% since the market’s last weekly gain on June 9.
The rubber contract on the Shanghai futures exchange for September delivery fell 105 yuan to finish at 12,115 yuan ($1,690.36) per metric ton. Japan’s benchmark Nikkei average closed 0.57% lower.
Chinese authorities announced measures on Friday intended at boosting sales of automobiles and electronics in a bid to shore up a sluggish economy, but the steps failed to impress investors who have been seeking stronger stimulus.
Data earlier this week showed China’s economy grew at a frail pace in the second quarter as demand weakens at home and abroad.
“The new auto stimulus may take a while to take effect and offer small reprieve, only if consumers bite amidst a high-interest rate environment,” said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.
“On the supply side, heavy rains across most producing countries meant raw material prices did not follow the downward trend. Weaker USD also made it another negative margin week for processors,” Miller added.
Asian shares were subdued on Friday after earnings reports from Tesla and Netflix failed to dazzle, while the dollar and Treasury yields held gains ahead of an action-packed week that could see the end of the US tightening cycle.
The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 128.3 US cents per kg, down 0.2%.
Comments
Comments are closed for this article.