SINGAPORE: Japanese rubber futures slipped on Monday, weighed down concerns about demand prospects in top consumer China and a stronger yen, although higher synthetic rubber prices put a floor below prices. The Osaka Exchange (OSE) rubber contract for January delivery closed down 2.4 yen, or 0.73%, at 326.5 yen ($2.25) per kg.
The January rubber contract on the Shanghai Futures Exchange (SHFE) closed up 60 yuan, or 0.37%, at 16,155 yuan ($2,261.43) per metric ton.
Natural rubber prices can gain from the uptrend in the butadiene rubber prices on the SHFE, but the gains will be capped by persistent weak demand from China, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.
The gaining Japanese yen can also weigh on natural rubber contracts traded on the OSE, added Jacob. The most active October butadiene rubber contract on the SHFE rose 135 yuan, or 0.94%, to finish at 14,435 yuan ($2,020.66) per metric ton.
Another round of weak Chinese economic data is raising pressure on Beijing to loosen the fiscal spigot further and even dole out shopping vouchers to get growth back towards this year’s target of roughly 5%. The US dollar slipped sharply against the yen, falling more than 1% to 146.01. A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers.
Oil prices eased as fears of weaker demand in top importer China weighed on market sentiment, while investors focussed on the progress of ceasefire talks in the Middle East, which could reduce supply risks.
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