SINGAPORE: Japanese rubber futures fell on Tuesday amid pessimism among traders in top consumer China and a weak yen, although rising oil prices limited losses.
Osaka Exchange’s rubber contract for February delivery finished 0.6 yen, or 0.3% lower at 235.4 yen ($1.59) per kg.
Meanwhile, the contract on the Shanghai futures exchange for January delivery rose 15 yuan to finish at 14,280 yuan ($1,956.81) per metric ton.
Geopolitics and a slowing economy are fuelling pessimism among US businesses operating in China, with the proportion of firms optimistic about their five-year outlook in the country falling to a record low, a survey released on Tuesday said.
The yen fell 0.1% to 147.76 per dollar and was kept pinned near last week’s 10-month low of 147.95. A weaker yen makes assets denominated by the currency more affordable for overseas buyers. Oil prices rose on Tuesday for the fourth consecutive session, as weak shale output in the US spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia.
The fluctuating rubber prices are expected to find support from oil prices potentially reaching $100 per barrel, which in turn might stabilise or increase natural rubber prices due to the substitution effect, a Singapore-based rubber trader said.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Japan’s benchmark Nikkei average closed down 0.87%.
Asian shares sank on Tuesday as worries about the Chinese property sector weighed on markets from Hong Kong to Australia, while Japanese investors sold chip stocks on their return from a holiday-extended weekend.
The front-month rubber contract on Singapore Exchange’s SICOM platform for October delivery last traded at 142 US cents per kg, up 0.4%.
Comments
Comments are closed for this article.