SINGAPORE: Japanese rubber futures fell on Monday as higher inventories, lower tyre production and pessimism on electric vehicle demand outweighed the impact of higher oil prices.
The Osaka Exchange (OSE) rubber contract for July delivery closed down 4.7 yen, or 1.64%, at 282.0 yen ($1.91) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 140 yuan to end at 13,560 yuan ($1,888.18) per metric ton. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.9% from last Friday, marking their ninth straight week-on-week increase.
Some tyre manufacturers in Shandong’s Dongying and Weifang regions have planned to wrap up productions by end-January in view of the upcoming holiday period, China-based consultancy Longzhong reported. Shandong is a significant hub for tyre manufacturing in China.
US new vehicle sales are expected to fall 1.5% in January year-on-year on seasonally slower sales and signs of cooling demand for electric vehicles (EV), a report by industry consultants JD Power and GlobalData said.
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