SINGAPORE: Japanese rubber futures reversed course to end higher on Wednesday, helped by a weaker yen, although soft economic data from top consumer China capped further gains.
The Osaka Exchange (OSE) rubber contract for December delivery rose 4.7 yen, or 1.47%, to finish at 324.3 yen ($2.01) per kg. The September rubber contract on the Shanghai Futures Exchange (SHFE) closed down 20 yuan, or 0.14%, at 14,625 yuan ($2,010.12) per metric ton.
The most active August butadiene rubber contract on the SHFE was down 320 yuan, or 2.14%, at 14,640 yuan (2,012.18) per metric ton. The dollar rose 0.07% to 161.43 yen as the currency pair traded in a tight range ahead of the Bank of Japan’s meeting at the end of the month. A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers.
China’s consumer prices grew for a fifth month in June but missed expectations, while producer price deflation persisted, with domestic demand mired on a slow recovery track despite support measures for the world’s second-largest economy.
Oil prices dipped on Wednesday as the impact from Hurricane Beryl dissipated and inflation data highlighted stubbornly weak consumer demand in top crude importer China.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Markets remain “choppy and directionless” as they weigh the impact of supply and demand factors, said a Singapore-based trader.
More information and time are needed to determine the market’s direction, the trader added. The front-month August rubber contract on Singapore Exchange’s SICOM platform last traded at 163.2 US cents per kg, up 0.1%.
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