SINGAPORE: Japanese rubber futures ticked down on Friday, posting their first weekly loss in three weeks as concerns over weaker seasonal demand outweighed prospects of further monetary stimulus from top consumer China.
The May Osaka Exchange (OSE) rubber contract closed down 2 yen, or 0.54%, at 369.4 yen ($2.42) per kg. The contract shed 2.38% this week, its first weekly fall since Nov. 22. The May rubber contract on the Shanghai Futures Exchange (SHFE) shed 220 yuan, or 1.17%, to hit 18,525 yuan ($2,545.52) per metric ton, a 2.17% loss for the week.
The most active February butadiene rubber contract on the SHFE slipped 150 yuan, or 1.1%, to 13,445 yuan ($1,847.48) per metric ton. * Winter is the traditional off-season for demand in the automobile tyre industry, and it is expected that the overall operating rate of rubber tyre producers in December may decline, Chinese financial information site Hexun Futures said in a note.
After the Central Economic Work Conference (CEWC), stimulus measures may be introduced for large expenditures such as automobiles, but it will take time to verify the effectiveness of the policies, and markets should be wary of the risk of insufficient support for rubber prices, Hexun said.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres. China pledged on Thursday to increase the budget deficit, issue more debt and loosen monetary policy to maintain a stable economic growth rate as it girds for more trade tensions with the US ahead of a second Donald Trump presidency. The remarks came in a state media readout of the CEWC, an annual agenda-setting meeting of China’s top leaders, held on Dec. 11-12.
The front-month January rubber contract on Singapore Exchange’s SICOM platform last traded at 198.5 US cents per kg, down 1.6%.
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