SINGAPORE: Japan’s rubber futures fell for a fourth session on Wednesday, as tariff threats from US President-elect Donald Trump clouded top consumer China’s demand prospects, while Bejing’s muted stimulus package also weighed.
The April Osaka Exchange (OSE) rubber contract closed down 2.8 yen, or 0.81%, at 344.0 yen ($2.22) per kg. The January rubber contract on the Shanghai Futures Exchange (SHFE) fell 190 yuan, or 1.06%, to 17,815 yuan ($2,465.61) per metric ton.
Natural rubber prices are under the grip of a sharply strengthening US dollar, imminent trade risks arising from policies under Trump’s presidency, and a huge outflow of speculative funds from Asia to the US, as traders are betting on interest rates remaining higher for longer in the US, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.
“An already weak demand outlook for natural rubber has now been weakened further on account of the potential trade risks,” said Jacob. “The disappointment over China’s highly anticipated stimulus measures is another key factor keeping sentiment down in natural rubber futures markets.”
Chinese banks extended 500 billion yuan ($69.5 billion) in new loans last month, falling sharply from September and trailing analysts’ expectations, according to data released after the close of market hours on Monday.
The weak reading on credit demand came on top of data showing the slowest consumer price growth in four months in October and deepening producer price deflation.
Sentiment in China remained largely downbeat after Beijing’s stimulus package on Friday disappointed investors speculating on a fiscal bazooka.
The front-month December rubber contract on Singapore Exchange’s SICOM platform last traded at 189.7 US cents per kg, down 1.2%.
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